Blackstone Mortgage Trust, Inc. :BXMT-US: Earnings Analysis: Q1, 2016 By the Numbers

Blackstone Mortgage Trust, Inc. reports financial results for the quarter ended March 31, 2016.

Highlights

  • Summary numbers: Revenues of USD 123.00 million, Net Earnings of USD 57.05 million.
  • Gross margins narrowed from 89.48% to 88.93% compared to the same period last year, operating (EBITDA) margins now 46.59% from 66.85%.
  • Change in operating cash flow of 102.95% compared to same period last year is about the same as change in earnings, likely no significant movement in accruals or reserves.
  • Earnings rose compared to same period last year, despite decline in operating and pretax margins.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

2015-03-31 2015-06-30 2015-09-30 2015-12-31 2016-03-31
Relevant Numbers (Quarterly)
Revenues (mil) 63.41 80.48 138.36 128.38 123
Revenue Growth (%YOY) 88.4 89.52 174.6 120.36 93.98
Earnings (mil) 35.39 29.28 66.89 65.27 57.05
Earnings Growth (%YOY) 170.9 -12.5 203.71 203.7 61.18
Net Margin (%) 55.82 36.39 48.34 50.84 46.38
EPS 0.6 0.36 0.72 0.7 0.61
Return on Equity (%) 9.43 5.86 10.71 10.43 9.11
Return on Assets (%) 2.93 1.51 2.63 2.72 2.41

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Market Share Versus Profits

Revenues History
Earnings History

Compared to the same period last year, BXMT-US‘s change in revenue was close to the amount of its change in earnings. It remains to be seen how the rest of its peer group’s results will turn out and if BXMT-US‘s performance is a sign of any major shift in the composition of market share in this sector. Also, for comparison purposes, revenues changed by -4.19% and earnings by -12.59% compared to the previous period.

Earnings Growth Analysis

The company’s earnings rose year-on-year. But this growth has not come as a result of improvement in gross margins or any cost control activities in its operations. Gross margins went from 88.93% to 89.48% for the same period last year, while operating margins (EBITDA margins) went from 46.59% to 66.85% over the same time frame.

Cash Versus Earnings – Sustainable Performance?

BXMT-US‘s year-on-year change in operating cash flow of 102.95% is around its change in earnings. This suggests that there are likely no significant movement in accruals or reserves for managing earnings this period.

Margins

Despite a decline in operating (EBIT) margins as well as a decline in pretax margins, the company’s earnings rose.

EBIT Margin History
PreTax Margin History

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Company Profile

Blackstone Mortgage Trust, Inc. is a real estate investment trust, which focuses primarily on loans and securities backed by commercial real estate assets. It operates through two segments: Loan Origination and CT Legacy Portfolio. The company was founded by Samuel Zell, John R. Klopp and Craig M. Hatkoff in July 1997 and is headquartered in New York, NY.

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