July 31, 2019 / 11:47 AM / 10 months ago

Apollo posts second-quarter distributable earnings just shy of estimates

(Reuters) - Alternative asset manager Apollo Global Management (APO.N) said on Wednesday second-quarter distributable earnings rose 7% year on year, as growth in transaction and management fees from its credit business helped offset a decline in earnings from private equity and real assets.

Jim Zelter, Co-President, Apollo Global Management speaks during the Milken Institute's 22nd annual Global Conference in Beverly Hills, California, U.S., April 29, 2019. REUTERS/Mike Blake

Apollo said after-tax distributable earnings (DE) – the cash available for paying dividends – rose to $230.8 million in the second quarter of 2019, compared with $218.2 million a year earlier.

The New York-based firm said DE per share rose to 56 cents per share, from 52 cents per share a year earlier. That was just shy of the average analyst forecast of 57 cents, according to data compiled by Refinitiv.

Jefferies analysts Gerald O’Hara and Daniel Fannon, who rates Apollo’s stock “buy,” said in a note to investors that the company’s earnings “reflect relatively muted exit activity” during the quarter, referring to asset sales.

Apollo’s performance fee income rose to $176.9 million from $129 million a year earlier owing to fewer asset sales across its private and public investments.

The earnings lag slightly the trend set by private equity rivals Blackstone Group LP (BX.N), Carlyle Group (CG.O) and KKR & Co Inc (KKR.N), whose second quarter earnings beat analysts’ estimates.

Under generally accepted accounting principles (GAAP), Apollo said net income per share on a diluted basis rose to 75 cents per share, up from 25 cents per share a year earlier. Blackstone and KKR reported 45 cents per share and 93 cents per share respectively.

Fees earned from its credit business, which accounts for more than half of Apollo’s asset under management, rose 40% during the quarter. This was driven mainly by earnings from fundraising activity and management fees from permanent capital.

Total asset under management rose to $311.9 billion, up 3% from three months earlier.

Apollo declared a distribution of 50 cents per share.

Reporting by Chibuike Oguh; Editing by Bill Trott

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