Blackstone Group was last trading to the downside by 12.5% to $21.25 in pre-market activity, following its Q3 earnings release in which it swung to a $113.2 million ($0.44/share) loss, compared to earnings of $372.5M last year. Analysts were expecting EPS of $0.30. Blackstone recorded $802.6M of non-cash charges related to compensation from IPO unit awards and amortization of intangibles. Third-quarter revenues rose 14% to $526.7M, but were well short of expectations of $765M. Three of its four segments posted revenue growth, including Corporate Private Equity +42% to $227.3M, Asset Management +88% to $124.9M and M&A Advisory +60% to $84.3M. Its Real Estate division sales dropped 44% to $109.1M. CEO Stephen A. Schwarzman highlighted the revenue growth despite the "very significant credit market dislocations." He said this environment provides both challenges and opportunities. Schwarzman commented further saying, "While it will be difficult to structure very large leveraged transactions in corporate private equity and real estate until the credit markets improve, pricing of assets is more favorable. Additionally, Blackstone's marketable alternatives and advisory businesses continue to grow and are not dependent on access to the lending markets." (Earnings call transcript later today). Shares of Blackstone gained 0.75% to $24.28 on Friday.
Commentary: For Solid Companies, Fed Rate Changes Are Just Noise • Immense Opportunity in Blackstone Group
Stocks to watch: BX. Competitors: FIG, GS, MER, MS