Blackstone (BX) Stock Up 5.6% on Q4 Earnings Beat, Higher AUM
Shares of Blackstone’s BX gained 5.6% following the release of its fourth-quarter and full-year 2022 results. Quarterly distributable earnings of $1.07 per share handily outpaced the Zacks Consensus Estimate of 95 cents. The figure, however, reflects a decline of 37% from the prior-year quarter. Our estimate for the metric was 96 cents per share.
Results primarily benefited from a rise in assets under management (AUM) balance, mainly driven by inflows and lower expenses. However, a tough operating environment hampered performance fees and management fees, which led to a fall in revenues.
Net income attributable to Blackstone was $557.9 million compared with $1.4 billion in the year-ago quarter.
In 2022, distributable earnings per share of $5.17 grew 8% year over year and beat the consensus estimate of $5.05. Our estimate for the metric was $5.06 per share. Net income attributable to Blackstone was $1.75 billion, down significantly from $5.86 billion in 2021.
Segment Revenues & Expenses Decline
Total segment revenues were $2.34 billion, plunging 47% year over year. The top line also the Zacks Consensus Estimate of $2.62 billion. We had projected total segment revenues of $2.52 billion.
In 2022, total segment revenues rose 8% year over year to $12.59 billion. The top line, however, lagged the consensus estimate of $12.82 billion. We had projected total segment revenues of $12.77 billion.
On a GAAP basis, revenues were $1.07 billion, plunging 70%.
Total expenses (GAAP basis) were $1.07 billion, down 57%. The decline was due to a fall in total compensation and benefits costs. In the reported quarter, the company recorded negative unrealized performance allocation compensation costs.
As of Dec 31, 2022, Blackstone had $9.7 billion in total cash, cash equivalents and corporate treasury investments and $18.1 billion in cash and net investments. The company has a $4.1 billion credit revolver.
AUM Improves
Fee-earning AUM grew 11% year over year to $718.4 billion as of Dec 31, 2022. Total AUM amounted to $974.7 billion as of the same date, up 11% year over year. The rise in total AUM was largely driven by $226 billion in inflows during 2022.
We had projected fee-earning AUM and total AUM of $708.3 billion and $999.7 billion, respectively.
As of Dec 31, 2022, the undrawn capital available for investment was $186.6 billion.
Our Take
Blackstone remains well-poised for top-line growth, supported by a continued rise in AUM. The company is expected to keep gaining from its fund-raising ability. However, elevated expenses and a challenging operating backdrop are expected to hurt the bottom line in the near term.
Blackstone Inc. Price, Consensus and EPS Surprise
Blackstone Inc. price-consensus-eps-surprise-chart | Blackstone Inc. Quote
Currently, Blackstone carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Asset Managers
BlackRock, Inc.’s BLK fourth-quarter 2022 adjusted earnings of $8.93 per share surpassed the Zacks Consensus Estimate of $7.99. The figure reflects a decrease of 16.4% from the year-ago quarter.
The quarterly results benefited from a decline in expenses. However, lower revenues and AUM balance were the major headwinds for BLK.
Invesco’s IVZ fourth-quarter 2022 adjusted earnings of 39 cents per share surpassed the Zacks Consensus Estimate of 36 cents. The bottom line, however, plunged 54.7% from the prior-year quarter. Our estimate for earnings was 33 cents.
Results benefited from a decline in operating expenses. On the other hand, lower AUM balance and long-term outflows hurt IVZ’s revenues.
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