Blackstone Mortgage Trust, Inc. :BXMT-US: Earnings Analysis: Q2, 2016 By the Numbers : August 8, 2016

Blackstone Mortgage Trust, Inc. reports financial results for the quarter ended June 30, 2016.

We analyze the earnings along side the following peers of Blackstone Mortgage Trust, Inc. – NorthStar Realty Finance Corp. (NRF-US) that have also reported for this period.

Highlights

  • Summary numbers: Revenues of USD 130.37 million, Net Earnings of USD 63.08 million.
  • Gross margins narrowed from 90.00% to 87.84% compared to the same period last year, operating (EBITDA) margins now 53.16% from 38.28%.
  • Year-on-year change in operating cash flow of 320.68% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Earnings growth from operating margin improvements as well as one-time items.

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):

2015-06-30 2015-09-30 2015-12-31 2016-03-31 2016-06-30
Relevant Numbers (Quarterly)
Revenues (mil) 80.48 138.36 128.38 123 130.37
Revenue Growth (%YOY) 89.52 174.6 120.36 93.98 61.99
Earnings (mil) 29.28 66.89 65.27 57.05 63.08
Earnings Growth (%YOY) -12.5 203.71 203.7 61.18 115.41
Net Margin (%) 36.39 48.34 50.84 46.38 48.39
EPS 0.36 0.72 0.7 0.61 0.67
Return on Equity (%) 5.86 10.71 10.43 9.11 10.07
Return on Assets (%) 1.51 2.63 2.72 2.41 2.65

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Market Share Versus Profits

Revenues History
Earnings History

BXMT-US‘s change in revenue this period compared to the same period last year of 61.99% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that BXMT-US is holding onto its market share. Also, for comparison purposes, revenues changed by 5.99% and earnings by 10.58% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Earnings Growth Analysis

The company’s gross margins showed no year-on-year improvement. In spite of this, the company’s earnings rose, influenced primarily by the improvement in operating margins (EBITDA margins) from 38.28% to 53.16%. For comparison, gross margins were 88.93% and EBITDA margins were 46.59% in the last period.

Gross Margin Versus EBITDA Margin

Cash Versus Earnings – Sustainable Performance?

Operating Cash Flow Growth Versus Earnings Growth

BXMT-US‘s change in operating cash flow of 320.68% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.

Margins

The company’s earnings growth has also been influenced by the following factors: (1) Improvements in operating (EBIT) margins from 38.28% to 53.16% and (2) one-time items. The company’s pretax margins are now 53.15% compared to 40.41% for the same period last year.

EBIT Margin Versus PreTax Margin
EBIT Margin History
PreTax Margin History

Access our Ratings and Scores for Blackstone Mortgage Trust, Inc.

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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