A month has gone by since the last earnings report for Blackstone Group (BX). Shares have added about 5.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Blackstone Group due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Blackstone Q1 Earnings Miss Estimates, Revenues & AUM Improve
Blackstone reported first-quarter 2019 distributable earnings of 44 cents, lagging the Zacks Consensus Estimate of 52 cents. However, the figure reflects improvement from 41 cents earned in the prior-year quarter.
Concurrent to the results, the company announced that it is converting itself from a publicly traded partnership to a corporation, effective Jul 1, 2019. This move has been taken to attract more investors for its stock.
The reported quarter’s results reflected higher revenues and growth in AUM. However, higher expenses acted as a headwind.
Net income attributable to Blackstone was $481.3 million, up from $367.9 million in the year-ago quarter.
Revenues & AUM Improve, Costs Increase
Total revenues (GAAP basis) for the reported quarter were $2.02 billion, up 14% year over year. The top line beat the Zacks Consensus Estimate of $1.63 billion.
Total expenses (GAAP basis) increased 6% year over year to $1.04 billion due to rise in all expense components except for fund expenses.
Fee-earning AUM grew 2% year over year to $353 billion. Total AUM amounted to $511.78 billion as of Mar 31, 2019, up 14%. The rise in total AUM was largely driven by $42.9 billion of inflows, partially offset by $8.3 billion of realizations.
As of Mar 31, 2019, Blackstone had $4.1 billion in total cash, cash equivalents and corporate treasury investments, and $9.9 billion of cash and net investments.
Share Repurchase Update
The company repurchased 1.5 million units in the reported quarter.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
At this time, Blackstone Group has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Blackstone Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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