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Blackstone (BX) Stock Gains 2% Despite Q1 Earnings Miss

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Blackstone’s (BX - Free Report) first-quarter 2020 distributable earnings of 46 cents per share missed the Zacks Consensus Estimate of 49 cents. Nevertheless, the figure reflects an increase of 4.5% from the prior-year quarter.

Shares of Blackstone gained 2% in pre-market trading. Investors became optimistic as the company’s revenues and assets under management (AUM) witnessed growth. However, the full day’s trading will depict a better picture of the actual price performance.

The company recorded higher expenses in the quarter, which hurt results to some extent. However, higher revenues and growth in fee-earnings AUM as well as total AUM were positives.

Net loss attributable to Blackstone was $1.07 billion against net income of $481.3 million recorded in the year-ago quarter.

Revenues & AUM Improve, Expenses Rise

Total segment revenues were $1.14 billion, up 4.2% year over year. The top line lagged the Zacks Consensus Estimate of $1.31 billion. On a GAAP basis, the company recorded negative revenues of $3.08 billion against revenues of $2.02 billion reported in the prior-year quarter.

Total expenses (GAAP basis), excluding compensation and benefits costs, increased 6.7% year over year to $203.8 million.

Fee-earning AUM grew 19.8% year over year to $423.06 billion. Total AUM amounted to $538.01 billion as of Mar 31, 2020, up 5.1% year over year. The rise in total AUM was largely driven by $27.3 billion of inflows.

As of Mar 31, 2020, Blackstone had $4.2 billion in total cash, cash equivalents and corporate treasury investments, and $8 billion in cash and net investments.

Share Repurchase Update

The company repurchased 5 million shares in the quarter.

Our Viewpoint

Growth in AUM, driven by inflows, is expected to continue to aid Blackstone’s top line in the near term amid the coronavirus-induced slowdown. Moreover, the company is well-positioned to gain from its fund-raising ability and revenue mix. However, lower chances of sustainability of its capital-deployment activities remain a major near-term concern. Also, continuously increasing expenses are expected to hamper the bottom line to an extent in the near term.

Blackstone Group Inc/The Price, Consensus and EPS Surprise
 

Blackstone Group Inc/The Price, Consensus and EPS Surprise

Blackstone Group Inc/The price-consensus-eps-surprise-chart | Blackstone Group Inc/The 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 & Earnings Release Dates of Other Investment Managers

BlackRock, Inc.’s (BLK - Free Report) first-quarter 2020 adjusted earnings of $6.60 per share lagged the Zacks Consensus Estimate of $6.69. The figure was marginally lower than the year-ago quarter’s number.

While Affiliated Managers Group, Inc. (AMG - Free Report) is slated to announce results on Apr 27, Ares Management Corporation (ARES - Free Report) will report its numbers on May 6.

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