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Carlyle Q1 earnings exceed forecast as stock markets gain

By Reuters

  • 03 May 2017
Carlyle Q1 earnings exceed forecast as stock markets gain
Credit: Thinkstock

Private equity firm Carlyle Group LP posted first quarter earnings that handily beat expectations on Wednesday, in line with its peers, after a buoyant stock market lifted investment returns across the industry.

The results are the latest sign that a rally in the S&P 500 .SPX to a record high in the first quarter had served U.S. buyout firms well by bolstering returns. Carlyle's peers Blackstone Group LP, KKR & Co LP and Apollo Global Management LLC all reported first-quarter earnings that surpassed expectations.

Carlyle said it earned an economic net income (ENI) of $364.6 million after taxes, more than six times what it earned a year earlier. That translated into $1.09 of ENI per share after taxes, well above analyst forecasts for 38 cents per share and the second-highest on record since another bumper earnings since the fourth quarter of 2013, it said.

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ENI is a crucial performance measure for U.S. private equity firms as it accounts for unrealized gains or losses in investments.

The Washington D.C.-based firm said its private equity investments appreciated 9 percent in the first three months, better than a 5.5 percent gain in the S&P 500 index in the same period.

Holdings in the energy sector, currently the biggest industry Carlyle is invested in, has also fared well as oil prices steadied around $50, Carlyle said. A source close to Carlyle but who declined to be named said Carlyle was most invested in upstream production of energy at the moment.

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Despite the strong results, Carlyle's distributable earnings, which show cash available to pay dividends, fell to $55 million from $129 million a year ago.

That translated to distributable earnings of 13 cents a share, compared to 35 cents a year earlier.

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