Hedge fund and private equity firm The Blackstone Group LP on Friday posted a narrower loss for the third quarter, as its private equity holdings gained value and its real estate investments stabilized.
Adjusted results topped expectations, and positive comments from its CEO helped lift the stock in afternoon trading.
Blackstone said its loss after paying preferred dividends fell to $176.2 million, or 91 cents per common unit, from $340.3 million, or $1.56 per unit in the 2008 third quarter.
Adjusted to exclude initial public offering and acquisition-related charges, the firm reported a profit of $275.3 million, or 25 cents per share, compared with a loss of $502.6 million, or 45 cents per share, last year.
Blackstone's revenue turned positive, to $597 million, from negative revenue of $160.3 million in the year-ago quarter amid deterioration of its vast real estate holdings. Management and advisory fees, however, fell 18 percent to $367.6 million.
The results topped estimates of analysts polled by Thomson Reuters, who had expected profit of 15 cents per unit and revenue of $450.6 million, on average. Analyst estimates typically exclude one-time gains and charges.
Expenses fell 10 percent to $3.07 billion, from $3.39 billion last year.
Chairman and CEO Stephen A. Schwarzman said in a statement that in the year since the financial crisis began, equity and debt markets have continued to heal, the cost of borrowing has declined and the credit is becoming more available.
"We believe the worst is behind us, though a recovery could be gradual and uneven," Schwarzman said.
He said there are many investment opportunities available now. The company said $1.3 billion had been committed, but not yet deployed, to deals in its corporate private equity unit as of Sept. 30. It is also considering opportunities several initial public offerings.
There also has been an increase in potential deals in its real estate segment.
Assets under management slipped 3 percent during the quarter to $96.3 billion, from $99.7 billion a year ago.
Blackstone shares rose $1.11, or 8 percent, to $14.98 in afternoon trading. The stock has traded between $3.55 and $17.22 in the past 52 weeks, and has more than doubled since the start of the year.