Blackstone posts biggest quarterly loss since IPO

NEW YORK: Blackstone Group, the world���s largest private-equity firm, posted the biggest quarterly loss in 18 months as a public company as the financial crisis eroded the value of the businesses and real estate it has acquired.

The loss was $502.5 million, or 44 cents a share, compared with a profit of $234 million, or 21 cents, a year earlier, the New York-based company said on Thursday in a statement. Blackstone had been expected to break even, based on the average estimate of seven analysts in a Bloomberg survey.

The quarterly loss was the company���s second since chairman Stephen Schwarzman sold shares to the public in June 2007 at the peak of a two-year boom in leveraged buyouts. Within weeks, private-equity transactions dried up as record losses on subprime mortgages scared banks and investors from lending.

Blackstone has been forced to write down the value of the companies and property it owns to match a global decline in prices for almost all types of assets.

���The environment was the worst they���ve had to experience as a public company,��� said Daniel Fannon, an analyst with Jefferies & Co. in San Francisco, who rates the stock ���hold��� and doesn���t own it.

Investors focus on Blackstone���s economic net income, a measure of profit that excludes compensation costs tied to the IPO. Those expenses will result in net losses in its first five years as a public company. The net loss widened to $340.3 million, or $1.27 a share, from $113.2 million, or 44 cents, a year earlier.

Blackstone fell 74 cents, or 8.6%, to $7.86 at 9:34 am in New York Stock Exchange composite trading. Blackstone���s stock had fallen 72% since the IPO, compared with the 37% decline by the Standard & Poor���s 500 Index.