Blackstone Posts Quarterly Profit

NEW YORK (Reuters) – Private equity firm Blackstone Group LP (BX.N) posted a quarterly profit, topping expectations and reversing a year-earlier loss, and said it expects to do more deals following an improvement in the lending markets.

The company, which has immense real estate and private equity assets, has increased its deal activity in the past few months, including buying Anheuser-Busch InBev’s (ABI.BR) U.S. theme parks for up to $2.7 billion. It is also considering initial public offerings for a number of its companies.

Blackstone’s third-quarter earnings before income taxes, noncash charges for vesting equity-based compensation, and amortization of intangible assets — a measure it calls “economic net income” (ENI) — were $278.4 million, compared with a loss of $509.3 million a year earlier.

On an after-tax basis, ENI was 25 cents a share. Analysts expected, on average, 15 cents a share, according to Thomson Reuters I/B/E/S/.

Chief Executive Stephen Schwarzman said in a press release that the worst is over, although a recovery in the economy could be “gradual and uneven.”

“We see many opportunities to deploy our substantial available capital,” he said in a statement.

The value of Blackstone’s private equity portfolio rose by 5 percent in the third quarter, although the value of its real estate portfolio fell by 0.4 percent.

Blackstone shares rose 56 cents to $14.43 in early trading on Friday. The shares have doubled in price this year, and the company is valued at about $15.6 billion at current levels. It went public in June 2007 at $31 a share.

Blackstone prefers to focus on the measure ENI because of the big payouts associated with its more than $4 billion initial public offering.

On a GAAP basis, its third-quarter net loss was $176 million, compared with a loss of $340 million a year earlier.

The company said it would pay its regular quarterly distribution of 30 cents a share to unitholders.

By Megan Davies
(Editing by John Wallace and Steve Orlofsky)