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Blackstone Revenues Beat Estimates
The current business climate will undoubtedly continue to challenge
Blackstone Group (BX 14.58); its ability to navigate the sluggish
environment is debatable. Constricted capital and credit slow business activity
and pressure corporate performances. Those are portentous conditions for
Blackstone's business model.
Still, fourth quarter management and advisory fees totaled $447.5 million, up 27% from the previous year. Wall Street pegged fourth quarter revenues at $434.6 million. After including charges associated with performance fees and allocations, the company's total reported revenues totaled $345.0 million. One year ago Blackstone posted fourth quarter reported revenues of $1.3 billion.
Adjusted per share earnings after taxes totaled just $0.08 per share. The results paled in comparison to the prior year when the firm earned $0.72 per adjusted unit.
Additional comments from Blackstone offered little encouragement to investors. The company noted reduced borrowing ability and a material decline in new private equity acquisition volume. Additionally, most private equity acquisitions have been smaller in size with less favorable terms. Management believes such difficult market conditions in the U.S. and Europe will persist during 2008 and there is little visibility as to when such conditions might improve.
Since its debut, shares of BX have continually disappointed investors.
Blackstone's stock is down roughly 60% since its debut as a publicly traded
company in 2007; this year alone, shares are down nearly 35%. Shares of
Blackstone boast an above average 8.0% dividend yield.
Shares of investment firm Apollo Investment (AINV 14.74) have also fallen
in 2008, though less substantially. AINV is currently down almost 14%
year-to-date and are now trading at levels consistent with its first appearance
on the market four years ago. Given its depressed price, Apollo currently kicks
off an amazing 14% dividend yield.
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