Private equity company Blackstone Group LP reported a deep quarterly loss on Friday and said it would not make a quarterly payout to shareholders after being hammered by the financial crisis and shutdown of the credit markets.
The company reported a fourth-quarter loss of $827.1 million before income taxes, noncash charges for vesting equity-based compensation, and amortization of intangible assets — a measure it calls “economic net income.”
On an after-tax basis, the loss was 68 cents a share, compared with a profit of 8 cents a year earlier. Analysts polled by Reuters had expected a loss of 40 cents a share.
Blackstone 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.
The company eliminated its fourth-quarter payout and said its full-year payout to shareholders was 90 cents a share — lower than the $1.20 it targeted. Distributions for 2009 could also fall below $1.20, it said.
“2008 was one of the most challenging operating environments in the last several decades,” Blackstone’s chief executive and co-founder, Stephen Schwarzman, said in a press release.
Schwarzman and co-founder Peter Peterson did not receive bonuses in 2008, Blackstone said.
A revival in leverage is vital for New York-based Blackstone to be able to do deals of any significant scale and sell off current investments.
Blackstone shares have fallen to a fraction of their June 2007 initial public offering price of $31. The shares were down 27 cents to $3.60 in Friday morning trade.