It has been about a month since the last earnings report for The Blackstone Group L.P. (NYSE:BX) . Shares have lost about 2.1% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is BX due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Blackstone Q1 Earnings Beat, Capital Actions Announced
Blackstone reported first-quarter 2018 economic net income (ENI (MI:ENI)) of 65 cents per share, which handily surpassed the Zacks Consensus Estimate of 46 cents. However, the figure was 20% below the prior-year quarter level.
The quarter saw an improvement in assets under management (AUM), mainly driven by inflows. However, lower revenues and a rise in expenses were the undermining factors.
Blackstone reported ENI of $791.7 million, down 18% year over year.
Revenues & Costs Decline
Total revenues (GAAP basis) declined 8% year over year to $1.77 billion. The decrease was mainly due to lower total investment income and incentive fees. However, the top line surpassed the Zacks Consensus Estimate of $1.69 billion.
Total expenses (GAAP basis) rose 7% year over year to $982.9 million. The increase was primarily due to a rise in fund expenses and general, administrative and other costs.
Fee-earning AUM grew 23% year over year to $334.7 billion. Total AUM amounted to $449.6 billion as of Mar 31, 2018, up 22% year over year. The rise in total AUM was largely driven by $18.2 billion of inflows.
As of Mar 31, 2018, Blackstone had $5.4 billion in total cash, cash equivalents and corporate treasury investments.
Capital Deployment Update
Blackstone authorized share repurchase of up to $1 billion of common units and Blackstone Holdings partnership units. This nearly triples $335.8 million of buyback authorization left under the prior authorization.
Moreover, Blackstone received approximately $580 million of pre-tax proceeds in connection with concluding GSO’s investment sub-advisory relationship with FS Investments in April. The company plans to distribute part of the proceeds to unitholders. This will likely result in an incremental 30 cents per unit to be distributed over the next three quarters.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There have been two revisions higher for the current quarter compared to two lower.
The Blackstone Group L.P. Price and Consensus
VGM Scores
At this time, BX has a poor Growth Score of F, however its Momentum is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.
Our style scores indicate that the stock is more suitable for momentum investors than value investors.
Outlook
BX 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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