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The Carlyle Group(CG-Q)

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Why The Carlyle Group Stock Tanked by Nearly 14% Today

Motley Fool - Thu May 4, 2023

What happened

Thursday wasn't an especially inspiring day for the stock market, but it was an exceptional downer for investors of The Carlyle Group(NASDAQ: CG). Shares of the storied financial services company dove by almost 14%, a far worse performance than the 0.7% dip of the S&P 500 index. The culprit was easy to identify.

So what

Carlyle released its first-quarter figures before the trading session opened Thursday, revealing that it earned revenue of $859 million. That was a notable decline from the same period a year ago, when the finance company took in $1.58 billion. On the bright side, that result beat expectations: Analysts had been collectively modeling for revenue of less than $815 million.

The better-than-expected results did not, however, extend to the company's distributable earnings. These clocked in at a shade under $272 million ($0.63 per share), comparing unfavorably to both Q1 2022's nearly $303 million and the average analyst estimate of $0.68 per share.

Those declines didn't stop Carlyle from boosting its dividend, albeit modestly. Management reiterated in the earnings release that it is bumping the quarterly payout to $0.35 per share from the preceding level of nearly $0.33. The newly raised distribution will be handed out on May 23 to investors of record as of May 16.

Now what

"We are in the midst of one of the most complex financial markets in recent memory, which is clouding the near-term outlook and impacting market sentiment," said CEO Harvey Schwartz in the earnings report.

He sounded a hopeful note, though, pointing out that Carlyle has a history of surviving turbulent times, and saying that he expects the company to continue expanding and diversifying its slate of offerings.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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