Blackstone’s BX second-quarter 2020 distributable earnings of 43 cents per share were in line with the Zacks Consensus Estimate. However, the figure declined 25% from the prior-year quarter.
The company’s shares have gained more than 1% in pre-market trading, indicating that investors have taken the results in their stride. A better picture is likely to emerge following the full day’s trading session.
The results reflect an improving assets balance, mainly driven by inflows. However, a decline in segment revenues and higher operating expenses were the undermining factors.
Net loss attributable to Blackstone was $568.3 million, up 86% year over year.
Segment Revenues Down, Expenses Rise
Total segment revenues were $1.11 billion, down 16% year over year. Also, the top line lagged the Zacks Consensus Estimate of $1.13 billion. On a GAAP basis, revenues of $2.52 billion were up 69% from the prior-year quarter.
Total expenses (GAAP basis) increased 36% year over year to $1.17 billion. The rise in total compensation and benefits costs were partly offset by lower general, administrative and other costs, interest expenses, as well as fund expenses.
As of Jun 30, 2020, Blackstone had $4.5 billion in total cash, cash equivalents and corporate treasury investments, as well as $9 billion in cash and net investments. Further, the company has a $1.6 billion undrawn credit revolver.
Assets Balance Improves
Fee-earning assets under management (AUM) grew 12% year over year to $435.8 billion. Total AUM amounted to $564.5 billion as of Jun 30, 2020, up 3% year over year. The rise in total AUM was largely driven by $20.3 billion of inflows.
As of Jun 30, 2020, undrawn capital available for investment was $155.9 billion, which was driven by fundraising activity for the latest flagship funds.
Share Repurchase Update
The company repurchased 2 million shares in the quarter.
Growth in AUM, driven by inflows, is expected to continue aiding Blackstone’s top line in the near term amid coronavirus-induced slowdown. Also, the company is well positioned to gain from its fund-raising ability. Further, continuously increasing expenses are expected to hamper the bottom line to an extent in the near term.
Blackstone Group IncThe Price, Consensus and EPS Surprise
Blackstone Group IncThe price-consensus-eps-surprise-chart | Blackstone Group IncThe 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
Zacks Rank #3 BlackRock, Inc.’s BLK second-quarter 2020 adjusted earnings of $7.85 per share hugely surpassed the Zacks Consensus Estimate of $6.90. The figure also reflects a rise of 22.5% from the year-ago number.
Zacks Rank #3 Affiliated Managers Group, Inc. AMG is slated to announce quarterly results on Jul 27, while Invesco IVZ, currently holding a Zacks Rank #2 (Buy), is set to report quarterly numbers on Jul 28.
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