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Blackstone Group returns to profit in 3Q

NEW YORK -- Blackstone Group LP said Thursday that it returned to a profit in the third quarter as fees jumped. Last year, the stock market downturn siphoned revenue from the private-equity giant.

A stock market rebound since last summer has helped boost results at Blackstone, which buys stakes in companies or entire corporations and sells them later, invests in real estate and lends to other investors. Through the first nine months of this year, the company's revenue is up 20 percent.

The New York company reported net income of $128.8 million, or 24 cents per common union, in the July-September quarter, compared with a loss of $274.6 million, or 56 cents per unit, a year earlier.

A separate profit measure typically used by private equity firms came to $621.8 million, or 55 cents per unit, from a loss of $380 million, or 34 cents per unit, a year ago. That measure, economic net income, is preferred by private equity firms and strips out stock-based compensation and other charges.

Analysts expected profit of 46 cents per share, according to FactSet.

Revenue came to $1.22 billion, compared with negative revenue of $124.1 million a year ago. Analysts had forecast revenue of $1.04 billion. The company's revenue comes from performance fees, management and advisory fees and income from investments.

In the prior-year quarter, as the stock market soured, the value of some of the funds managed by Blackstone declined. That essentially ate away at the potential performance and investment fee revenue that the company stood to collect at the end of the fund's life. So the figure ended up as a loss of revenue on its balance sheet.

The company only collects performance and investment revenue if, at the end of a fund's life, the fund has generated a certain level of gains.

In the latest quarter, Blackstone's performance fees, management and advisory fees, and income from investments each had better results than a year ago, as the S&P 500 index increased 27 percent.

Blackstone's units ended regular trading up 67 cents, or 4.5 percent, at $15.71. Its units are up 12 percent so far this year.