Blackstone (BX) Q4 Earnings & Revenues Beat, Stock Up 2.1%

Shares of The Blackstone Group L.P. (NYSE:BX) gained nearly 2.1% in pre-market trading, following the release of its fourth-quarter 2017 results. Economic net income (ENI (MI:ENI)) of 71 cents per share topped the Zacks Consensus Estimate by a penny. Also, the figure was 4% above the prior-year quarter level.

Improvement in revenues largely boosted the results. Also, growth in assets under management (AUM), mainly driven by inflows, continued to impress. However, rise in expenses was a tailwind.

Blackstone reported ENI of $850.4 million in the fourth quarter, reflecting an increase of 5% year over year.

For 2017, ENI of $2.81 per share was in line with the Zacks Consensus Estimate. The figure was 41% above the prior-year level. Blackstone reported ENI of $3.38 billion, reflecting an increase 41% year over year.

Revenues & Costs Rise

Total revenues for the reported quarter (GAAP basis) increased 20% year over year to $1.88 billion, primarily driven by a rise in performance fees, total investment income as well as interest and dividend revenues. Also, the top line surpassed the Zacks Consensus Estimate of $1.81 billion.

For 2017, total revenues (GAAP basis) surged 39% year over year to $7.12 billion. The figure handily outpaced the Zacks Consensus Estimate of $6.47 billion.

Total expenses (GAAP basis) rose 22% year over year to $1.01 billion. The increase was primarily due to a rise in fund expenses and interest expenses.

Fee-earning AUM grew 21% year over year to $335.34 billion. Total AUM amounted to $434.13 billion as of Dec 31, 2017, up 18% year over year. The rise in total AUM was largely driven by $108 billion of inflows.

As of Dec 31, 2017, Blackstone had $5.1 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 abilities. However, increased dependence on management and advisory fees can affect the company’s financials in the near term.

The Blackstone Group L.P. Price, Consensus and EPS Surprise

The Blackstone Group L.P. Price, Consensus and EPS Surprise | The Blackstone Group L.P. Quote

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.’s (NYSE:BLK) fourth-quarter 2017 adjusted earnings of $6.24 per share outpaced the Zacks Consensus Estimate of $6.08. Results benefited from an improvement in revenues, rise in AUM and steady long-term inflows. However, increase in operating expenses acted as a headwind.

Ameriprise Financial Inc.’s (NYSE:AMP) fourth-quarter 2017 adjusted operating earnings per share of $3.26 comfortably surpassed the Zacks Consensus Estimate of $3.09. Results benefited from an improvement in revenues as well as growth in AUM and assets under administration. However, rise in expenses acted as a headwind.

Invesco Ltd. (NYSE:IVZ) reported fourth-quarter 2017 adjusted earnings of 73 cents per share, outpacing the Zacks Consensus Estimate of 70 cents. Results were primarily supported by higher revenues and long-term net inflows. However, increase in operating expenses was an undermining factor.

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