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What to Expect from Blackstone’s Future Earnings

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Mar. 15 2016, Published 1:16 p.m. ET

Earnings to pick up in June

Blackstone (BX) is expected to report earnings per share of $0.19 in the March quarter as compared to $0.61 in the previous quarter and $1.37 in the corresponding quarter last year. The steep decline is mainly due to the stock market (IVV) rout in 2016 partially offset by a recovery in March. Blackstone is expected to report earnings per share of $0.67 in the June quarter as compared to $0.43 in the corresponding quarter last year. The company missed Wall Street analysts’ economic net income estimates of $0.64 in the fourth quarter of 2015. It posted economic net income of $0.61.

Blackstone is the world’s biggest alternative asset manager. The stock has risen 11.7% over the past one month, the lowest among other alternative asset managers. Carlyle (CG) rose by 35%, Apollo Global Management (APO) rose by 30%, and KKR (KKR) rose by 18% over the same period.

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Blackstone reported an economic net income of $436 million in the fourth quarter mainly due to lower performance fees, partially offset by higher interest and dividend income. Its assets under management rose by 16% on a year-over-year basis to $336 billion. The company invested $15.7 billion into new opportunities. This represents roughly half of the company’s investments for the entire 2015 period.

Alternative investment giant

Blackstone provides financial advisory services to clients around the world. The company’s alternative asset management includes investment vehicles focused on private equity, real estate, hedge fund solutions, funds of funds, non-investment-grade credit, and multi-asset class exposures outside other funds’ mandates.

Blackstone also provides financial advisory services including financial and strategic advisory services, restructuring and reorganizing advisory services, and capital markets and fund placement services. The company faces competition from alternative asset managers as well as traditional asset managers that form part of the SPDR S&P 500 ETF Trust (SPY).

Blackstone’s revenue fell by 40% in the last fiscal year. The revenue growth for Blackstone’s peers Carlyle Group (CG), KKR (KKR), and Apollo Global Management (APO) fell by 7.2%, 18.3%, and 59.6%, respectively.

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