Apollo Global's flat quarterly earnings miss expectations

By Echo Wang

NEW YORK (Reuters) -Apollo Global Management reported flat second-quarter adjusted net income on Thursday, missing Wall Street expectations as a spike in revenue generated from fees was offset by a drop in income from its retirement business.

The New York-based investor in private equity and corporate credit posted adjusted net income of $1.01 billion for the three months though June, almost the same as a year ago.

That translated into adjusted net income per share of $1.70, which came in lower than the average Wall Street analyst estimate of $1.76, according to LSEG data.

Apollo reported a record quarter for fee-related earnings of $516 million, a 16.7% rise from a year earlier, for asset management and arranging financing for deals.

"We generated record fee-related earnings in the second quarter behind particularly strong momentum in asset management," Apollo Chief Executive Mark Rowan said.

Apollo however posted a 12.5% decline in spread-related earnings, a performance metric for its Athene retirement-services unit, to $710 million.

Apollo's total assets under management increased by approximately 13% year-over-year to $696 billion, growth split evenly between asset management and retirement services. This was partially offset by $61 billion in outflows and $29 billion in assets being divested.

Apollo also reported a reserve of unspent capital of $68 billion and deployed $70 billion in investments. Debt originations set a quarterly record, reaching $52 billion. The company said it would pay a dividend of 46.25 cents per share.

Apollo shares were down 2.3% at $122.38 in early trading, giving the alternative asset manager a market value of about $69.6 billion. The shares are up 31% year to date.

Apollo inked a series of deals in the last few weeks. It agreed to buy British parcel delivery company Evri for 2.7 billion pounds ($3.5 billion) and reached a deal to acquire International Game Technology's gaming division alongside Everi Holdings, a gambling machines company, for a combined $6.3 billion in an all-cash deal.

Apollo also provided a $700 million investment to Sony Music Group.

(Reporting by Echo Wang in New York; Editing by Sonali Paul and David Holmes)