Apollo Global Management Q3 Profit More Than Doubles, Beats Estimates

(RTTNews) - Private equity firm Apollo Global Management, LLC (APO) on Thursday reported a profit for the third quarter that more than doubled from last year, reflecting higher carried interest income from the company's private equity segment. Economic net income per share for the quarter beat analysts' estimates.

The company's net income for the third quarter was $192.52 million, or $1.13 per Class A share, up from $82.79 million or $0.55 per Class A share in the year-ago period.

Total economic net income or ENI after taxes was $528.6 million or $1.34 per share, compared to $379.0 million or $0.98 per share in the same period last year. On average, fifteen analysts polled by Thomson Reuters expected the company to report earnings of $0.94 per share for the quarter. Analysts' estimates typically exclude special items.

The $149.6 million increase in ENI was driven by favorable performance in Apollo's Incentive Business, reflecting higher carried interest income from Apollo's private equity segment.

Total revenues for the quarter grew 59 percent to $1.13 billion from $712.37 million last year. Analysts had a consensus revenue estimate of $688.79 million for the quarter.

Carried interest income from affiliates was $952.00 million in the quarter, up 73 percent from the year-ago period. Total realized gains from carried interest income was $639 million in the quarter, compared to $230 million in the same period last year.

Apollo's Incentive Business reported a 66 percent increase in total carried interest income, driven by increased valuations of a number of investments held by funds managed within Apollo's private equity segment. This includes Sprouts Farmers Market, Inc. and Athlon Energy, both of which completed initial public offerings during the quarter.

Apollo's advisory and transaction fees from affiliates surged 91 percent from the year-ago period to $28.96 million, while management fees from affiliates rose 2 percent to $151.13 million.

Apollo's total assets under management or AUM was $112.69 billion as at the end of the third quarter, up 3 percent from $109.70 billion in the same period last year. This includes new capital raised of $4.0 billion.

Subsequent to the end of the third quarter, Athene Holding Ltd. closed its acquisition of Aviva USA. As a result of the transaction, pro-forma AUM for Apollo at September 30, 2013 was about $157 billion.

Apollo declared a third-quarter 2013 cash distribution of $1.01 per Class A share, which comprises a regular distribution of $0.07 per Class A share and a distribution of $0.94 per Class A share primarily attributable to fund realizations and interest and dividend income earned by its funds.

This distribution will be paid on November 29, 2013 to holders of record at the close of business on November 22.

In Thursday's regular trading session, APO is trading at $32.50, down $1.02 or 3.04 percent on a volume of 282,778 shares.