Apollo Global Management, LLC
) third-quarter 2013 economic net income (ENI) came in at $1.34
per share, substantially beating the Zacks Consensus Estimate of
75 cents. Moreover, this compares favorably with ENI of 98 cents
recorded in the year-ago period.
Better-than-expected results were driven by top-line growth,
partially offset by higher operating expenses. Moreover, an
increase in assets under management (AUM) was the tailwind for
Apollo Global reported ENI of $528.6 million, up 39.5% from
$379.0 million in the prior-year quarter.
Behind the Headlines
Apollo Global's total revenue increased 58.9% year over year to
$1,132.1 million. This also beat the Zacks Consensus Estimate of
$660.0 million. The rise was mainly driven by an increase in
carried interest from the company's private equity segment.
Total expense increased 15.4% from the prior-year quarter to
$600.1 million. The rise was primarily due to increase in total
compensation and benefits charges, interest expense, professional
fees as well as occupancy costs. These were partially offset by a
decrease in general, administrative and other costs, placement
fees as well as depreciation and amortization expenditures.
Fee-earnings AUM rose 2.1% from the year-ago quarter to $79.3
billion. Total AUM as of
Sep 30, 2013 was $112.7 billion, up 2.7% from $109.7 billion as
of Sep 30, 2012.
Capital and Liquidity
As of Sep 30, 2013, Apollo Global had $1.1 billion in cash and
cash equivalents and $728.0 million debt.
Along with the earnings release, Apollo Global announced a cash
distribution of $1.01 per Class A share. The distribution
comprises a quarterly distribution of 7 cents and an additional
94 cents related to fund realization. The distribution will be
paid on Nov 29 to stockholders of record as of Nov 22.
Performance of Other Investment Managers
Waddell & Reed Financial, Inc.
) earnings surpassed the Zacks Consensus Estimate. Robust results
were driven by top-line growth, partially offset by higher
) third-quarter 2013 adjusted earnings were in line with the
Zacks Consensus Estimate. Results benefited from rise in
revenues, which were offset by higher operating expenses.
The Blackstone Group L.P.
) third-quarter results, on the other hand, missed the Zacks
Consensus Estimate by a penny. Lower-than-expected results were
due to a fall in the top line, partially offset by lower
We believe that robust performance of Apollo Global's investment
portfolios, particularly its private equity segment, will drive
growth going forward. Moreover, the company's strong liquidity
position and consistent fund raising ability indicate increased
capital deployment activities in the forthcoming quarters.
However, we remain concerned about the present capital market
volatility exerting pressure on the company's financial
performance in the near term.
Currently, Apollo Global carries a Zacks Rank #3 (Hold).
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