It has been about a month since the last earnings report for Blackstone Group (NYSE:BX). Shares have lost about 8.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Blackstone Group due for a breakout? 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 catalysts.
Blackstone Q3 Earnings Beat as Revenues Rise, Costs Up
Blackstone reported third-quarter 2018 economic net income (ENI (MI:ENI)) of 76 cents per share, which surpassed the Zacks Consensus Estimate of 73 cents. The figure also improved 12% from the prior-year quarter.
Results benefited from increase in revenues, which was supported by growth in assets under management and inflows. However, rise in expenses was the undermining factor.
Blackstone reported ENI of $911.4 million, up 11% year over year.
Revenues & Costs Increase
Total revenues (GAAP basis) grew 11% year over year to $1.92 billion, mainly driven by higher total investment income, and interest and dividend revenues. Also, the top line beat the Zacks Consensus Estimate of $1.82 billion.
Total expenses (GAAP basis) rose 13% year over year to $1.02 billion mainly on a rise in general, administrative and other costs, and total compensation and benefits.
Fee-earning AUM grew 20% year over year to $342.3 billion. Total AUM amounted to $456.7 billion as of Sep 30, 2018, up 18% from the year-ago quarter. The rise in total AUM was largely driven by $24.1 billion of inflows.
As of Sep 30, 2018, Blackstone had $5.4 billion in total cash, cash equivalents and corporate treasury investments and $11.4 billion of cash and net investments.
Capital Deployment Update
Blackstone returned nearly $1 billion to unitholders through a special cash distribution of 10 cents per share and repurchase of 6 million units in the reported quarter. This was part of the company’s previously announced capital deployment program.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -14.65% due to these changes.
VGM Scores
At this time, Blackstone Group has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Blackstone Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
The Blackstone Group L.P. (BX): Free Stock Analysis Report
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