NEW YORK (AP) — Blackstone Group LP, one of the world's largest private-equity firms, on Monday reported a third-quarter loss on charges related to its initial public offering this year.
Blackstone reported a loss of $113.2 million, or 44 cents per share. The loss included the impact of $802.6 million of non-cash charges for compensation and other items linked to its IPO.
Last year, the company reported a profit of $372.5 million when it was a private concern. Revenue rose to $526.7 million from $461.5 million a year earlier.
The results reflect Blackstone's first full quarter operating as a public company after its debut on the New York Stock Exchange in June. Analysts expected a profit of 30 cents per share on revenue of $765 million. Analyst earnings predictions typically exclude one-time charges.
Blackstone said a global credit crisis has made it more difficult to finance deals, especially given a backlog of leveraged loans that banks have yet to process. That has created a “dampening effect” for new corporate, private equity buyouts.
“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,” said Chairman and Chief Executive Stephen Schwarzman in a statement. “Additionally, Blackstone's marketable alternatives and advisory businesses continue to grow and are not dependent on access to the lending markets.”
During the third quarter, Blackstone said its corporate private equity rose 42 percent. The business, which buys companies and then takes them private, also posted transaction fees of $11.9 million.
The real estate business posted a 44 percent decline in revenue to $109.1 million. Blackstone said the decline was because “weakness in subprime residential lending area spread to general commercial real estate.”
Blackstone's asset management business reported revenue of $124.9 million, up 88 percent on the year. The firm took advantage of market volatility during the quarter, securing big gains from its hedge and proprietary trading funds.