Apollo Global Management LLC (APO) Tops Q3 EPS Views; Revs Heavy
7:04 AM ET, 11/07/2013 - Street Insider
Apollo Global Management LLC (NYSE: APO) reported Q3 EPS of $1.34, $0.40 better than the analyst estimate of $0.94. Revenue for the quarter came in at $1.15 billion versus the consensus estimate of $688.79 million.
Apollo's total AUM was $112.7 billion as of September 30, 2013, an increase of $3.0 billion compared to $109.7 billion as of September 30, 2012. Fee-generating AUM was $79.3 billion as of September 30, 2013, an increase of $1.6 billion compared to $77.7 billion as of September 30, 2012. Subsequent to the end of the third quarter of 2013, Athene Holding Ltd. (together with its subsidiaries, Athene ), for which Apollo currently provides a full suite of investment management services, closed its acquisition of the U.S. annuity operations of Aviva plc ( Aviva USA ). As a result of that transaction, pro-forma AUM for Apollo at September 30, 2013 was approximately $157 billion
LLC'sAPO -1.82% third-quarter profit more than doubled as the buyout firm’s revenue benefited from significantly higher carried interest income.
The company reported a profit of $192.5 million, or $1.13 a Class A share, up from $82.8 million, or 55 cents a share, a year earlier.
Economic net income rose to $1.34 a share from 98 cents a year earlier. Publicly traded private equity firms view economic net income as a better gauge of performance because it includes unrealized gains and employee compensation.
Analysts polled by Thomson Reuters forecast economic income of 94 cents a share.
Revenue grew 59% to $1.13 billion.
As part of revenue, carried interest income from affiliates jumped 73% to $952 million. Management fees rose 2.4% to $151.1 million.
Assets under management were $112.7 billion at the quarter’s end, up from $109.7 billion a year earlier.
Apollo, one of the most active buyout firms in exiting investments as markets have risen, sold at least eight blocks of shares in companies during the quarter, reaping more than $4 billion in proceeds, regulatory filings show. In addition, its buyout portfolio appreciated 18 percent in the quarter, fueling paper profits. Apollo’s Athene Holding Ltd. unit last month completed its acquisition of Aviva Plc’s U.S. insurance business after a 10-month approval process, adding to expected cash flow next year, according to Credit Suisse Group AG.
Apollo had “another exceptional quarter for fund performance and active portfolio harvesting,” Credit Suisse analysts led by Howard Chen said in a note to clients before the earnings were released. “Leading the way, we expect Apollo to report very robust returns in its private-equity portfolio.”