The Blackstone Group L.P. BX is scheduled to report fourth-quarter and full-year 2017 results before the opening bell on Feb 1. Its revenues and earnings for the quarter are expected to grow year over year.
Last quarter, the company’s economic net income surpassed the Zacks Consensus Estimate. Higher revenues were partially offset by a rise in expenses.
Moreover, Blackstone boasts an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, with an average positive surprise of 11.9%.
However, activities of the company in the fourth quarter failed to win analysts’ confidence. As a result, its Zacks Consensus Estimate for earnings of 70 cents has remained stable over the last 30 days. Nevertheless, the figure reflects a year-over-year improvement of 2.9%.
Also, the Zacks Consensus Estimate for sales of $1.81 billion for the quarter reflects improvement of 15% from the year-ago quarter.
The company’s price performance does not seem very impressive. Its shares have gained 18.5% in 2017, underperforming the 31.2% rally of the industry it belongs to.
The Blackstone Group L.P. Price and EPS Surprise
The Blackstone Group L.P. Price and EPS Surprise | The Blackstone Group L.P. Quote
Will the price performance improve post Q4 earnings release? Let’s see how things have shaped up for this announcement.
Earnings Whispers
According to our quantitative model, it cannot be conclusively predicted if Blackstone will be able to beat the Zacks Consensus Estimate in the fourth quarter. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The Earnings ESP for Blackstone is 0.00%.
Zacks Rank: Blackstone has a Zacks Rank of 3, which increases the predictive power of ESP. But we also need a positive ESP to be confident of an earnings beat.
Factors to Influence Q4 Results
With improvement in the overall economic scenario, the company’s fund-raising ability is likely to continue to aid the uptrend in its fee-earning AUM and total AUM. Moreover, management is of the opinion that low double-digit AUM growth and high-single-digits to low-double-digits growth in fee-earning AUM will continue in the quarter.
The Zacks Consensus Estimate for fee-earning AUM for the to-be-reported quarter is $298 billion, which reflects an improvement of 4.2% sequentially. Also, the Zacks Consensus Estimate for total AUM of $401 billion depicts 3.6% growth from the prior quarter.
Given the growth in assets, the company’s performance fee is also expected to be positively impacted in the quarter.
Also, Blackstone continues to expand its investment activity to capitalize on public market dislocation and is expected to report higher deployment of capital during the quarter.
On the expense side, as the company’s well-performing funds require more headcount, costs are likely to increase.
Stocks That Warrant a Look
Here are some stocks you may want to consider, as according to our model, these have the right combination of elements to post an earnings beat this quarter.
Apollo Global Management, LLC APO is scheduled to report results on Feb 1. It has an Earnings ESP of +3.61% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Lazard Ltd. LAZ is also slated to report results on Feb 1. It has an earnings ESP of +2.17% and a Zacks Rank #3.
Eaton Vance Corporation EV is expected to report results on Feb 28. It has an Earnings ESP of +0.64% and a Zacks Rank of 2.
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