Blackstone Quarterly Results Reflect Slow Deal-Making Environment

Blackstone's stock experienced a decline on Thursday following its quarterly results, which were impacted by lower asset sales in a slow deal-making environment.

In the third quarter ended September, Blackstone reported distributable earnings of $1.2 billion, or 94 cents a share. This figure represents the cash available to pay dividends to shareholders. However, analysts tracked by FactSet had expected earnings of $1.01 a share.

In terms of net realizations, the amount received from the sale of assets was $259.44 million, which is a 36% decrease compared to the previous year. This metric is crucial for assessing profitability.

Meanwhile, Blackstone's revenue for the quarter amounted to $2.32 billion, declining by 10% from the same period last year and missing the consensus estimate of $2.60 billion.

As a result of these developments, the stock fell over 6% to $95.94 on Thursday, marking its largest one-day percentage decline since March.

On a positive note, revenue from management and advisory fees increased by 3% compared to the previous year to reach $1.65 billion. However, this figure fell short of the expected $1.75 billion.

Blackstone's total fee-related earnings for the quarter were $1.1 billion, which represents a 5% decrease from one year ago. Chief Financial Officer Michael Chae attributed this decline to a drop in transaction fees, which are activity-based.

The lower transaction volume can partly be attributed to the interest rate increases implemented by the Federal Reserve. These rate hikes have resulted in higher bond yields and increased costs for items such as mortgages and cars. President Jonathan Gray stated, "Until you get some settling out of that, I think it will mute the transaction activity on all sides."

While Blackstone acknowledges the uncertainty surrounding the revival of transaction activity, it remains optimistic that real estate buying and selling as well as business transactions will resume. The company believes that there will be opportunities for individuals looking to refinance due to maturity.

During the latest quarter, Blackstone raised $25 billion in new funds and currently has $200 billion available for investment. The company's total assets under management exceed $1 trillion and it recently became part of the S&P 500 index.