Apollo Management reports mixed bag second quarter earnings
In a surprise earnings miss, Apollo Global Management LLC (APO - Get Report) reported on Wednesday, August 6th, that its second-quarter earnings were off by around 6%, under consensus analysts expectations. Digging into the 2Q report, analysts point out that Apollo sold fewer of its private equity holdings while both taxes and expenses rose during the period.
Details on 2Q earnings report
Total economic net income after taxes came to $207.5 million, relative to $220.1 million same quarter last year. This resulted in an ENI per share after taxes of 52 cents, below analysts estimate of 66 cents, according to Thomson Reuters.The firm cited a higher tax provision and increased profit-sharing expenses for the $12.6 million reduction in ENI. Apollo Management’s private equity portfolio was up 5% the quarter, close to the same percentage as both The Carlyle Group LP (CG - Get Report)‘s and KKR & Co. L.P. (KKR - Get Report)‘s private equity funds, but below the 8.4% appreciation seen in The Blackstone Group L.P. (BX)’s buyout funds. ENI in Apollo’s private equity segment fell 32%. on the other hand, ENI was up 114% in the credit segment due to higher management fees as Athene Holding Ltd life insurance firm finalized the acquisition of the U.S. life and annuities business of Aviva Plc ADR (AV) (AV). Of note, the credit segment represents almost two-thirds of Apollo’s assets. Total assets under management were $167.5 billion at the end of the period June 30th, an increase from $159.3 billion at the end of the prior quarter. The hedge fund firm declared a 2Q dividend of 46 cents, a major improvement from 1.32 cents a year ago.