The Blackstone Group LP
) fourth-quarter 2012 economic net income (ENI) came in at 59
cents per share, substantially beating the Zacks Consensus
Estimate of 47 cents. Moreover, this compares favorably with
earnings of 42 cents recorded in the year-ago quarter.
Better-than-expected results were aided by a substantial growth
in top line, which was offset by higher operating expenses to an
extent. Moreover, steady asset under management (AUM) and strong
balance sheet were the other positives for the quarter.
For full year 2012, ENI came in at $1.77 per share, surpassing
the Zacks Consensus Estimate of $1.63. This also compares
favorably with the earnings of $1.38 in the previous year.
Blackstone reported ENI of $670.0 million, rising 43.1% from
$468.2 million in the prior-year quarter. For 2012, ENI came in
at $1,995.3 million, rising 29.6% from $1,539.2 million in 2011.
Behind the Headlines
Blackstone's total revenue (GAAP basis) grew 33.0% to $1,217.1
million from $915.1 million in the year-ago quarter. This was
also ahead of the Zacks Consensus Estimate of $1,101.0 million by
The improvement in revenue was attributable to a solid increase
in total performance fees, total investment income as well as
interest and dividend revenue, partly offset by a dip in other
For the full year, total revenue came in at $4,091.4 million, up
23.6% from $3,252.6 million in the previous year. Revenues for
the full year reached 9.8% ahead of the Zacks Consensus Estimate
of $3,661.0 million.
Total expense (GAAP basis) also inched up 1.6% year over year to
$885.7 million. The rise was primarily due to a sizeable hike in
total compensation and benefits expenses along with interest
expenses. However, these were partly offset by lower fund
expenses as well as general, administrative and other costs.
Assets Under Management
Fee-earnings AUM fell marginally 0.4% from $168.6 billion in the
last quarter to $167.9 million. However, fee-earnings AUM grew
22.7% year over year from $136.8 billion. The year-over-year
increase was attributable to higher gross inflows and market
appreciation partly offset by outflows and realizations.
Total AUM as of Dec 31, 2012 was $210.2 billion, up 2.7% from
$204.6 billion as of Sep 30, 2012 and 26.5% from 166.2 billion as
of Dec 31, 2011. The rise was primarily driven by strong organic
net inflows and market appreciation across all asset management
Capital and Liquidity
As of Dec 31, 2012, Blackstone had $2.3 billion in cash and
liquid investments. Moreover, the company had $6.7 billion in
total cash and investments at the end of the quarter.
Furthermore, 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
Concurrent with the earnings release, Blackstone announced a
quarterly distribution of 42 cents per unit payable on Feb 19 to
stockholders of record as of Feb 11.
Performance of Other Asset Mangers
T. Rowe Price Group, Inc.
) reported its fourth-quarter 2012 earnings, a penny below the
Zacks Consensus Estimate. Elevated operating expenses were the
primary reasons for the earnings miss.
) fourth-quarter 2012 adjusted earnings substantially surpassed
the Zacks Consensus Estimate. The improvement was primarily
attributable to increased top line, partly offset by higher
Waddell & Reed Financial, Inc
) fourth-quarter 2012 earnings from continuing operations were
slightly ahead of the Zacks Consensus Estimate.
Better-than-expected results benefited from augmented top line,
partially offset by higher expenses.
Investment appreciation in Blackstone, along with the growing
need for risk management and alternative investment solutions
within the financial service industry, is expected to contribute
positively to the company over the long run.
Moreover, its sound dividend policy will reinforce investors'
confidence. In spite of posting good results in the quarter, the
persistent sluggish economic recovery will continue to keep the
company's financials under pressure in the near term.
BLACKROCK INC (BLK): Free Stock Analysis
BLACKSTONE GRP (BX): Free Stock Analysis
WADDELL&REED -A (WDR): Free Stock Analysis
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Currently, Blackstone retains a Zacks Rank #3 (Hold).