Blackstone Earnings Slide, but Payouts Still Healthy

Blackstone Group LP on Thursday said its second-quarter profit declined 74% as the pace of asset sales slowed, yet remained abundant enough to enable the firm to pay out its third-highest-ever quarterly dividend.

The New York firm reported second-quarter profit of $134.2 million, or 21 cents a share, down from $517 million, or 85 cents a share, in the same period last year.

Blackstone's second-quarter economic net income was $508 million, or 43 cents a share, down from $1.3 billion, or $1.15 cents a share, a year ago. The result fell shy of Wall Street's estimates for the profitability measure, which includes unrealized gains as well as cash earnings. Analysts polled by Thomson Reuters anticipated economic net income of 47 cents a share.

"We produced solid results for our investors in the second quarter with strong realization activity despite challenging market conditions," said Stephen Schwarzman, Blackstone's chairman and chief executive.

Blackstone's credit and hedge-fund arms notched higher economic net income than during the same time a year earlier, while its private equity and real estate businesses reported results that declined 74% and 72%, respectively, by that metric. Blackstone's soon-to-be-spun-out financial-advisory unit was down 58% in economic net income.

Firmwide, second-quarter fee revenue fell 8% to $590.8. Blackstone's share of deal proceeds, or performance fees, during the quarter was $569.7, less than half the $1.4 billion collected during the same period a year ago.

Blackstone, the world's largest private-equity firm, reported assets under management of $332.7billion, up from $278.9 billion a year ago and $310.5 billion at the end of March.

Meanwhile, its distributable earnings—the portion of profits in which shareholders can get a slice—were $1 billion in the second quarter, topping the year prior period's $765.2 million.

Blackstone said it would pay a dividend of 74 cents for the quarter, an increase from 55 cents in the same period a year earlier.

Blackstone shares closed up 0.6%, or 26 cents, at $41.33 on Wednesday. The stock is up 22.2% on the year.

Write to Ryan Dezember at [e-mail]

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