The Blackstone Group L.P. BX is scheduled to report first-quarter 2018 results before the opening bell on Apr 19. While the company’s asset under management (AUM) growth is expected to remain strong in the quarter, its revenues and earnings are projected to decline on a year-over-year basis.
Last quarter, the company’s economic net income surpassed the Zacks Consensus Estimate. Higher revenues and growth in AUM were partially offset by rise in expenses.
Notably, Blackstone boasts an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three out of the trailing four quarters, with an average positive surprise of 10.2%.
The Blackstone Group L.P. Price and EPS Surprise
The Blackstone Group L.P. Price and EPS Surprise | The Blackstone Group L.P. Quote
However, activities of the company in the first quarter failed to win analysts’ confidence. As a result, its Zacks Consensus Estimate for earnings of 76 cents remained unchanged over the last 30 days. Also, the figure reflects a year-over-year decline of 7.3%.
In fact, the Zacks Consensus Estimate for sales of $1.69 billion for the quarter also reflects a decline of 12.7% from the year-ago quarter.
Also, the company’s price performance does not seem very impressive. Its shares have gained only 5% in the past year, underperforming the 14.9% rally of the industry it belongs to.
Will the price performance improve post Q1 earnings release? Let’s see how things have shaped up for this announcement.
According to our quantitative model, it cannot be conclusively predicted if Blackstone will be able to beat the Zacks Consensus Estimate in the first quarter. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The Earnings ESP for Blackstone is 0.00%.
Zacks Rank: Blackstone has a Zacks Rank of 3, which increases the predictive power of ESP. But we also need a positive ESP to be confident of an earnings beat.
Factors to Influence Q1 Results
Driven by net inflows, the company’s fee-earning AUM and total AUM have been witnessing consistent growth since the past few years. In fact, with improvement in the overall economic scenario, Blackstone’s fund-raising ability is likely to continue aiding the uptrend in its fee-earning AUM and total AUM in the quarter.
The Zacks Consensus Estimate for fee-earning AUM for the to-be-reported quarter is $341 billion, which reflects an improvement of 1.8% sequentially. Also, the Zacks Consensus Estimate for total AUM of $450 billion depicts 3.7% growth from the prior quarter and 22.3% growth year over year.
Given the growth in assets, the company’s performance fee is also expected to be positively impacted in the quarter.
However, because of rise in compensation and benefit costs, the company’s overall expenses have remained elevated in the past few years. Moreover, as its well-performing funds require more headcount, expenses are likely to increase further during the quarter.
Stocks That Warrant a Look
Here are some stocks you may want to consider, as according to our model, these have the right combination of elements to post an earnings beat this quarter.
Comerica Incorporated CMA is scheduled to release results on Apr 17. It has an Earnings ESP of +0.95% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BB&T Corporation BBT is slated to release results on Apr 19. It has an Earnings ESP of +1.63% and carries a Zacks Rank #3.
The Bank of New York Mellon Corporation BK has an Earnings ESP of +0.21% and carries a Zacks Rank of 3. The company is also slated to release results on Apr 19.
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