The Blackstone Group L.P. (NYSE:BX) reported first-quarter 2017 economic net income (ENI (MI:ENI)) of 82 cents per share, which surpassed the Zacks Consensus Estimate of 69 cents. Moreover, the figure compared favorably with 31 cents recorded in the prior-year quarter.
Blackstone’s shares rose nearly 3.6% in pre-market trading, reflecting impressive revenue growth. Notably, the price reaction during the full trading session will provide a better idea about how investors accepted the results.
Better-than-expected results were attributable to a significant increase in revenues. Also, growth in assets under management (AUM) continued to impress. However, escalated expenses acted as a major headwind.
For the quarter, Blackstone reported ENI of $986 million, up significantly year over year.
Revenues Rise, Costs Jump
Total revenue (GAAP basis) increased significantly year over year to $1.94 billion backed by a significant rise in performance fees as well as interest and dividend revenues. Also, the top line handily surpassed the Zacks Consensus Estimate of $1.59 billion.
Total expenses (GAAP basis) flared up 50% year over year to $929.7 million. The increase was primarily due to a rise in total compensation and benefits, and a drastic increase in fund expenses.
Fee-earning AUM grew 15% year over year to $280.2 billion. Total AUM amounted to $368.2 billion as of Mar 31, 2017, up 7% year over year. The rise in total AUM was largely driven by $66.5 billion of gross inflows.
As of Mar 31, 2017, Blackstone had $5 billion in total cash, cash equivalents and corporate treasury investments.
Our Viewpoint
Blackstone remains well positioned to capitalize on the changing investment landscape by making long-term investments and augmenting its fund-raising ability. However, increased dependence on management and advisory fees can affect the company’s financials in the near term.
Currently, Blackstone carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Investment Managers
BlackRock, Inc. (NYSE:BLK) reported first-quarter 2017 adjusted earnings of $5.25 per share, which handily surpassed the Zacks Consensus Estimate of $4.94. The better-than-expected number was primarily driven by a rise in revenues, partially offset by higher expenses.
Among other investment managers, Ameriprise Financial, Inc. (NYSE:AMP) is slated to report results on Apr 24 and Waddell & Reed Financial, Inc. (NYSE:WDR) is slated to come up with its financial numbers on May 2.
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Waddell & Reed Financial, Inc. (WDR): Free Stock Analysis Report
AMERIPRISE FINANCIAL SERVICES, INC. (AMP): Free Stock Analysis Report
The Blackstone Group L.P. (BX): Free Stock Analysis Report
BlackRock, Inc. (BLK): Free Stock Analysis Report
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