Blackstone on Thursday reported third-quarter earnings above Wall Street's estimates, while its assets under management experienced significant growth. The alternative asset manager’s distributable earnings for the September quarter increased to $1.01 per share, up from $0.94 a year earlier. The consensus on Capital IQ had anticipated a normalized EPS of $0.92.
As a result, shares of Blackstone saw a rise of 5.8% during Thursday trading. Overall revenue surged to $3.66 billion, a notable increase from $2.54 billion reported the previous year. Segment revenue also showed a positive trend, climbing 5% to $2.43 billion, outperforming Street projections which had expected $2.36 billion. "Blackstone reported strong third-quarter results, highlighted by broad-based acceleration across our business," commented Chief Executive Stephen Schwarzman in a statement.
"We invested or committed $54 billion in the quarter -- the highest amount in over two years -- and deployed $123 billion in the last 12 months since the cost of capital peaked." Additionally, fee-related earnings rose 5% to $1.18 billion, and the company recorded substantial inflows of $40.54 billion in the quarter.
Assets under management increased by 10% to approximately $1.108 trillion, with fee-earning AUM showing a 12% advancement to $820.46 billion. In terms of performance by sector, real estate segment revenue ticked up 1%, while revenue from credit and insurance experienced a robust 28% increase. However, private equity segment revenue saw a decline of 5%.
Looking ahead, the asset manager anticipates a "material step-up" in fee-related earnings for the fourth quarter. This forecast is underpinned by the expectation of "the onset of full management fees for multiple funds exiting fee holidays," as indicated by Chief Financial Officer Michael Chae during an earnings call.
Furthermore, the company expects to see "robust growth" in fee-related performance revenue, while projecting a sequential decline in fee-related margin during the ongoing quarter according to Chae's comments. Price: 168.53, Change: +8.82, Percent Change: +5.52.