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What's in the Cards for Blackstone (BX) in Q1 Earnings?

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Blackstone (BX - Free Report) is scheduled to report first-quarter 2020 results on Apr 23, before the opening bell. Its revenues and earnings are likely to have witnessed growth in the quarter on a year-over-year basis.

In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results benefited from growth in assets under management (AUM) and higher revenues, partly offset by an increase in expenses.

Blackstone has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average positive surprise being 3%.

Blackstone Group Inc/The Price and EPS Surprise
 

Blackstone Group Inc/The Price and EPS Surprise

Blackstone Group Inc/The price-eps-surprise | Blackstone Group Inc/The Quote

However, business prospects and activities of the company in the first quarter failed to win analysts’ confidence. As a result, the Zacks Consensus Estimate for its earnings of 49 cents for the quarter has been revised 3.9% lower over the past seven days. The figure indicates a rise of 11.4% from the prior-year quarter’s reported number.

The consensus estimate for sales of $1.38 billion suggests 25.8% growth from the year-ago quarter’s reported figure.

Key Factors to Note

Blackstone has been witnessing a rise in fee-earning AUM and total AUM for the past few years on the back of its diversified products and revenue mix, superior position in the alternative investments space, and net inflows. However, the same trend is not likely to have continued in the to-be-reported quarter, owing to an overall challenging operating backdrop.

Due to concerns related to the impacts of the coronavirus outbreak, the first quarter mainly witnessed net outflows. Thus, asset growth is expected to have been muted.

Notably, the Zacks Consensus Estimate for fee-related performance revenues (segment revenues) for the first quarter is pegged at $19.5 million, which suggests a decline of 87.5% sequentially.

However, the consensus estimate for net management and advisory fees (segment revenues) of $956 million indicates growth of 1.1% from the prior quarter’s reported number.

Blackstone’s expenses have remained elevated over the past few years mainly because of higher general, administrative and other expenses. As the company continues to make investments in franchise, total expenses are expected to have remained elevated in the first quarter as well.

Here is what our quantitative model predicts:

Our quantitative model doesn't conclusively predict whether Blackstone will be able to beat the Zacks Consensus Estimate in the first quarter. That is because it does not have the right combination of two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or better.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Blackstone is 0.00%.

Zacks Rank: The company currently carries a Zacks Rank #3. While this increases the predictive power of ESP, we also need a positive ESP to be confident of an earnings beat.

Stocks That Warrant a Look

Here are some finance stocks that you may want to consider as these have the right combination of elements to post an earnings beat in their upcoming releases, per our model.

CURO Group Holdings Corp. is slated to release quarterly results on Apr 30. The company has an Earnings ESP of +1.47% and currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Virtu Financial, Inc. (VIRT - Free Report) is scheduled to report quarterly earnings on May 7. The company, which sports a Zacks Rank of 1 at present, has an Earnings ESP of +41.57%.

SB One Bancorp is likely to report quarterly earnings soon. The company, which carries a Zacks Rank of 3 at present, has an Earnings ESP of +0.85%.

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