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Blackstone (BX) Incurs Q4 Loss on Lower Revenues, AUM Rises

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Blackstone (BX - Free Report) reported fourth-quarter 2018 net loss of 2 cents per unit. The Zacks Consensus Estimate for earnings was pegged at 3 cents. Also, the figure reflects deterioration from 45 cents earned in the prior-year quarter.

Shares of Blackstone have declined nearly 1% in pre-market trading indicating that investors have not taken the results in their stride. The full day’s trading will depict a better picture.

Results were adversely impacted by decline in revenues. On the other hand, growth in assets under management (AUM) and lower expenses were the tailwinds.

Net loss attributable to Blackstone was $10.9 million against net income of $304.1 million in the year-ago quarter.

For 2018, net income per unit was $2.26, which lagged the Zacks Consensus Estimate of $2.34. However, the figure improved 2% year over year. Net income attributable to Blackstone grew 5% to $1.54 billion.

Revenues & Costs Decrease, AUM Improves

Total revenues (GAAP basis) for the reported quarter plunged 74% year over year to $505 million, mainly due to total investment loss and lower incentive fees. The top line beat the Zacks Consensus Estimate of $404.7 million.

Total revenues (GAAP basis) declined 4% year over year to $6.83 billion for 2018. The figure surpassed the consensus estimate of $5.87 billion.

Total expenses (GAAP basis) declined 53% year over year to $495.1 million mainly on lower fund expenses, interest expenses, and total compensation and benefits costs.

Fee-earning AUM grew 2% year over year to $342.5 billion. Total AUM amounted to $472.2 billion as of Dec 31, 2018, up 9%. The rise in total AUM was largely driven by $101 billion of inflows, partially offset by $34.1 billion of realizations.

As of Dec 31, 2018, Blackstone had $4.7 billion in total cash, cash equivalents and corporate treasury investments, and $10.1 billion of cash and net investments.

Share Repurchase Update

Blackstone repurchased of 7.8 million units in the reported quarter. This was part of the company’s previously announced capital deployment program.

Our Viewpoint

Blackstone is well positioned to capitalize on the changing investment landscape by making long-term investments and augmenting its fund-raising abilities. However, increased dependence on management and advisory fees can affect the company’s financials in the near term.

The Blackstone Group L.P. Price, Consensus and EPS Surprise

 

The Blackstone Group L.P. Price, Consensus and EPS Surprise | The Blackstone Group L.P. Quote

Currently, Blackstone carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Asset Managers

BlackRock’s (BLK - Free Report) fourth-quarter 2018 adjusted earnings of $6.08 per share missed the Zacks Consensus Estimate of $6.39. Further, the bottom line came in 2% lower than the year-ago figure.

Federated Investors, Inc. (FII - Free Report) delivered a positive earnings surprise of 1.7% in fourth-quarter 2018. Earnings per share of 61 cents surpassed the Zacks Consensus Estimate of 60 cents. However, the figure compares unfavorably with the prior-year quarter earnings of $1.31.

Invesco (IVZ - Free Report) reported fourth-quarter 2018 adjusted earnings of 44 cents per share, lagging the Zacks Consensus Estimate of 56 cents. Also, the figure was 39.7% below the prior-year quarter level.

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