Apollo’s Q2 Profits and Revenues Shrink

Apollo Global Management LLC (NYSE:APO), the asset management fund that went public just last year, was only able to report a  total economic net income (ENI) of $42 million, opposed to $125 million for the year ago quarter. This amounts to a more than a 60 percent fall in profits. The net earnings per share  (after taxes) were 5 cents, compared to 31 cents per share in second quarter of 2011, analysts at Bloomberg and Thomson Reuters expected a loss of 17 cents per share and a negative revenue of $73 million.  GAAP net loss suffered by Apollo Global Management LLC was $41 million (38 cents a Class A share) for this quarter, which is less than a $51 million (46 cents a share) loss suffered over the same period a year ago. Revenues declined 31% to $211.6 million.

Apollo's Q2 Profits and Revenues Shrink

The funds’s assets under management (“AUM”) rose 46 percent to $105 billion, from $72 billion in the second quarter of 2012.

“We reported solid financial results for the second quarter despite a challenging global market environment,” Leon D. Black, the firm’s chairman and CEO, said in a statement. “Our results again demonstrated the growth inherent in Apollo’s business model, as we actively raised and deployed capital around the world, and our diversified investment platform continued to generate cash distributions for our shareholders.”

The fresh investment by Apollo Global Management LLC (NYSE:APO) is the payment of $7.15 billion for El Paso Corp.’s (NYSE:EP), the deal was finalized in May. Apollo is also looking into bidding for McGraw-Hill Education, which will be divested off by McGraw-Hill Cos. (NYSE: MHP)  by the end of 2012. The fund suffered losses owing to its weaker performance in principle private equity funds. A competing hedge fund, The Blackstone Group L.P. (NYSE:BX) reported an equally troubled quarter with 74 percent losses,  with ENI declining from $804.2 million over the same period of 2011, to $212.3 million in this year.

Among the competitors of Apollo, BlackRock, Inc. (NYSE:BLK) was able to beat the analyst estimates by reporting an EPS of 310 cents. BLK profits decline 3% as compared to the second quarter of 2011. Another rival KKR & Co (NYSE: KKR) was not only able to defy analyst estimates, but also reported a handsome increase in net economic income from $315 million in second quarter of 2011 to $546.1 million in this quarter.

About the Author

Tabinda Hussain
Tabi covers hedge funds for ValueWalk. Although Tabi is an expert in hedge funds, her academic background is in Biology. Follow her on twitter @tabihussain