Apollo Global Management said Thursday that its profit tumbled by 84 percent in the second quarter, as its core private equity business grappled with difficult markets.
The investment firm said it earned $18.7 million for the quarter, down from $117.5 million in the same time a year ago.
That amounts to about 5 cents a share, still far better than the loss of 17 cents that analysts surveyed by Bloomberg had expected.
The profit was reported as economic net income after taxes, a measurement used by private equity firms that includes unrealized gains from investments. Using generally accepted accounting principles, the firm lost $41 million in the quarter, down from $51 million in the year-ago period.
Apollo attributed its weaker results to lower income from its mainstay private equity funds, compared with the year-ago period, when it sold Hughes Communications, the satellite Internet company. Its investments also showed slower growth, a problem that has affected some of its rivals, like the Blackstone Group.
But the firm said that its assets under management also grew 46 percent in the quarter, to $105 billion. Behind the increase was new capital that the firm had raised and acquisitions of other fund managers.
“We reported solid financial results for the second quarter despite a challenging global market environment,†Leon D. Black, the firm's chairman and chief executive, said in a statement. “Our results again demonstrated the growth inherent in Apollo's business model as we actively raised and deployed capital around the world, and our diversified investment platform continued to generate cash distributions for our shareholders.â€
Apollo's private equity business reported a 50 percent drop in economic net income for the quarter, to $55.8 million. While it reported lower unrealized gains, the division closed on its acquisition of the El Paso Corporation's exploration and production assets, a $7.1 billion deal that is one of the biggest leveraged buyouts since the financial crisis.
Other parts of Apollo's businesses also struggled with the market turmoil. Its capital markets unit reported an economic net loss of $14.4 million for the quarter, swinging from a gain of $10.5 million during the year-ago period.
Its real estate division reported a 76 percent drop in economic net income, to $600,000.
This post has been revised to reflect the following correction:
Correction: August 2, 2012
An earlier version of this article misstated the percentage decline in second-quarter earnings compared with the quarter a year ago. It was a drop of 84 percent, not 66 percent.
