Private equity company Blackstone Group LP reported a wide third-quarter loss today and said it had lowered the value of its investments amid turbulent markets.
Blackstone also warned that unless market conditions improve markedly, it may have to cut its quarterly dividend significantly, or "possibly (declare) no distribution at all." It currently pays 30 cents a share.
The third-quarter economic net loss of $509.3 million - before income taxes, noncash charges for vesting equity-based compensation and amortization of intangible assets - compares with a year-earlier profit of $229 million.
On a per-share basis, the loss after tax was 44 cents, compared with a profit of 21 cents a year earlier.
The earnings were sharply lower than analysts had expected. Analysts' average forecast was that the company would break even on a per-share basis, according to Reuters Estimates.
Blackstone, one of the world's largest private equity firms, prefers to focus on economic net income because of the huge payouts associated with its more than $4 billion initial public offering in June 2007.
On the basis of generally accepted accounting principles, its third-quarter loss was $365.5 million, compared with a loss of $107.3 million a year earlier.
Blackstone shares slid 12 percent in premarket trading to $7.53. They closed at $8.60 close on Wednesday on the New York Stock Exchange. The shares are now trading at about a quarter their June 2007 initial public offering price of $31.
Reuters