Blackstone Group (BX) Continues its Recovery; Beats Estimates by 10 Cents

As mentioned this morning, we added back to our Blackstone Group (BX) exposure as the stock jumped back over a key moving average on the back of a solid earnings report.  After 7 sessions of purgatory, the stock is in a better position today.

•  Private equity firm Blackstone Group LP (NYSE:BX - News) posted a forecast-beating quarterly profit and said it is gearing up for more deals and IPOs as the lending and equity markets recover.  


• Blackstone's third-quarter earnings before income taxes, noncash charges for vesting equity-based compensation, and amortization of intangible assets -- a measure it calls "economic net income" (ENI) -- were $278.4 million, compared with a loss of $509.3 million a year earlier.


• On an after-tax basis, ENI was 25 cents a share. Analysts expected, on average, 15 cents a share, according to Thomson Reuters I/B/E/S/.


• Revenue fell to $603.8 million in the latest quarter from $833 million a year earlier, although it did rise on a sequential basis from the second-quarter total of $403.6 million.
  
  


• The value of Blackstone's private equity portfolio rose by 5 percent in the third quarter, although the value of its real estate portfolio fell by 0.4 percent.


• The company said it would pay its regular quarterly distribution of 30 cents a share to unitholders.


• The company, which has immense real estate and private equity assets, has stepped up deal activity in the past few months, including buying Anheuser-Busch InBev's  U.S. theme parks for up to $2.7 billion. It is also considering initial public offerings for a number of its companies.


• "We see great opportunities to buy assets from motivated sellers," Blackstone Chief Operating Officer Tony James said on a conference call.  He said Blackstone has $27 billion of "dry powder" -- capital available for investment.


• Blackstone Chief Executive Stephen Schwarzman said in a press release that the worst is over, although a recovery in the economy could be "gradual and uneven."

• On a GAAP (generally accepted accounting principles) basis, Blackstone lost $176.2 million in the latest quarter, compared to $340.3 million a year ago. The latest GAAP results include $201 million in IPO- and acquisition-related charges, the company said, as well as other items. 

• JMP Securities reiterated its market perform rating on Blackstone shares following the report, calling the performance "a good, solid beat" with most of the upside coming from the company's real estate private equity and credit and marketable alternatives business.


• The firm also noted advisory revenues, though down on a year-over-year basis, did well in the latest quarter, coming in at $97.3 million, well ahead of JMP's estimate of $80.5 million, and higher on a sequential basis. Blackstone's restructuring and reorganization advisory unit has done well with so many companies paring down in the past year.