The Blackstone Group LP 's (
BX ) first-quarter 2013 economic net income (ENI)
came in at 55 cents per share, beating the Zacks Consensus Estimate
by a penny. Moreover, this compares favorably with ENI of 44 cents
per share recorded in the year-ago quarter.To read this article on Zacks.com click here.Zacks Investment
Better-than-expected results were aided by substantial top-line
growth, offset by higher operating expenses. Steady assets under
management (AUM) and improved balance sheet were the other
positives for the quarter.
Blackstone reported ENI of $628.3 million, rising 28.0% from
$491.2 million in the prior-year quarter.
Behind the Headlines
Blackstone's total revenue (GAAP basis) augmented 31.0% to
$1,246.5 million from $952.0 million in the year-ago quarter. This
also came ahead of the Zacks Consensus Estimate of $1,153.0 million
The improvement in revenues was attributable to a solid elevation
in total performance fees, total investment income as well as
interest and dividend revenues.
Total expense (GAAP basis) also increased 6.5% year over year to
$835.1 million. The rise was primarily due to a sizeable hike in
total compensation and benefits expenses along with interest
expenses. However, these negatives were partially offset by lower
fund expenses as well as reduced general, administrative and other
Assets Under Management
Fee-earnings AUM inched up 1.8% from $167.9 billion in the last
quarter and 9.4% from $156.3 billion in the year-ago quarter to
$170.9 billion. The year-over-year increase was attributable to
higher gross inflows and market appreciation, partially offset by
outflows and realizations.
Total AUM as of Mar 31, 2013 was $218.2 billion, up 3.8% from
$210.2 billion as of Dec 31, 2012 and 14.8% from 190.1 billion as
of Mar 31, 2012. The rise was primarily driven by strong organic
net inflows and market appreciation across all asset management
Capital and Liquidity
As of Mar 31, 2013, Blackstone had $2.2 billion in cash and liquid
investments. Moreover, the company had $6.7 billion in total cash
and investments at the end of the quarter.
The company had no borrowings outstanding against its $1.1 billion
revolving credit facility, which was amended in Jul 2012. The
amendment extended the expiry of the facility to Jul 2017.
Concurrent with the earnings release, Blackstone announced a
quarterly distribution of 30 cents per unit, payable on May 6 to
stockholders of record as of Apr 29.
Performance of Other Asset Managers
BlackRock, Inc. ( BLK )
substantially surpassed the Zacks Consensus Estimate. The
improvement was primarily attributable to increased top line,
partially offset by higher operating expenses.
Blackstone's investment appreciation coupled with the growing
requirement for risk management and alternative investment
solutions within the financial service industry is expected to
prove beneficial for the company going forward. Moreover, its sound
dividend policy is expected to boost investor's confidence.
However, a sluggish economic recovery is anticipated to mar
bottom-line improvement to some extent.
Among other asset managers, Waddell & Reed Financial
Inc . ( WDR ) is scheduled to report its
earnings on Apr 23 and T. Rowe Price Group, Inc. (
TROW ) on Apr
Currently, Blackstone carries a Zacks Rank #2 (Buy).