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Is an Earnings Beat in Store for Blackstone (BX) in Q3?

Zacks Equity Research

Blackstone BX is scheduled to report third-quarter 2019 results on Oct 23, before the opening bell. Its revenues and earnings for the to-be-reported quarter are expected to have witnessed a decline on a year-over-year basis.

In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results benefited from growth in assets under management (AUM) and lower expenses. However, a decline in revenues acted as a headwind.

Blackstone does not have an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in only two of the trailing four quarters.

Blackstone Group Inc/The Price and EPS Surprise
 

Blackstone Group Inc/The Price and EPS Surprise

Blackstone Group Inc/The price-eps-surprise | Blackstone Group Inc/The Quote

Activities of the company in the third quarter failed to win analysts’ confidence. As a result, the Zacks Consensus Estimate for earnings of 54 cents for the quarter has remained unchanged over the past seven days. The figure indicates a decline of 29% from the prior-year quarter’s reported number.

The consensus estimate for sales of $1.34 billion suggests a decline of 26.9% from the year-ago quarter’s reported figure.

Factors to Influence Q3 Results

Driven by net inflows, Blackstone’s fee-earning AUM and total AUM have been witnessing consistent growth since the past few years. The same trend is likely to have continued in the to-be-reported quarter despite an overall challenging operating backdrop.

The Zacks Consensus Estimate for fee-earning AUM for the third quarter is pegged at $413 billion, which indicates 20.8% improvement from the prior-year quarter’s reported number. Also, the consensus estimate for total AUM of $564 billion suggests 23.4% growth from the prior-year quarter’s reported figure.

Net management and advisory fees (segment revenues) are projected to be $878 million, indicating growth of 26.9% from the year-ago quarter’s reported number.

Blackstone’s expenses have remained elevated over the past few years mainly because of higher general, administrative and other expenses. As the company continues to make investments in franchise, total expenses are expected to have remained elevated in the third quarter.

Here is what our quantitative model predicts:

According to our quantitative model, chances of Blackstone beating the Zacks Consensus Estimate in the third quarter are high. That is because it has the right combination of two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or better.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Blackstone is +3.70%.

Zacks Rank: Blackstone currently has a Zacks Rank #3.

Other Stocks That Warrant a Look

Here are some other finance stocks that you may want to consider as these too have the right combination of elements to post an earnings beat this quarter, per our model.

Huntington Bancshares Incorporated HBAN is scheduled to release results on Oct 24. It presently has an Earnings ESP of +0.60% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Santander Consumer USA Holdings Inc SC has an Earnings ESP of +1.01% and a Zacks Rank #3 at present. The company is expected to release results on Oct 30.

Cullen/Frost Bankers, Inc CFR is slated to release results on Oct 31. It currently has an Earnings ESP of +0.07% and a Zacks Rank #3.

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Huntington Bancshares Incorporated (HBAN) : Free Stock Analysis Report
 
Cullen/Frost Bankers, Inc. (CFR) : Free Stock Analysis Report
 
Santander Consumer USA Holdings Inc. (SC) : Free Stock Analysis Report
 
Blackstone Group Inc/The (BX) : Free Stock Analysis Report
 
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