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What to Expect from Blackstone in 4Q17

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Earnings per share

The Blackstone Group (BX) is expected to report its 4Q17 earnings on February 1, 2018. Wall Street analysts have projected EPS (earnings per share) of $0.67 for 4Q17, which reflects a marginal decline from 4Q16. Analysts had a high EPS estimate of $0.78 and a low estimate of $0.55 for 4Q17.

While Blackstone’s EPS are expected to fall slightly between 4Q16 and 4Q17, the company’s revenue and expenses are expected to be higher.

Blackstone’s TTM (trailing-12-month) return on assets is 12.0%, whereas peers (XLF) Oaktree Capital (OAK), Ares Management (ARES), and KKR (KKR) have TTM returns on assets of 3.6%, 1.9%, and 6.1%, respectively.

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Revenue expectations

Analysts expect Blackstone to report revenue of $1.7 billion in 4Q17, with a high estimate of $1.77 billion and a low estimate of $1.57 billion. The company’s total revenue comprises performance fees, fee revenue, investment and interest income, and dividend revenue.

Blackstone generates the majority of its fee revenue in the form of management and advisory fees, which are affected by its AUM (assets under management). A rise in AUM would lead to a rise in the company’s fee revenue. Likewise, the company’s performance fees are affected by its fee-generating AUM, and they would rise together.

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