Fortress' 3Q loss widens to $57.4 million

Fortress lost $57.4 million, or 66 cents per share, during the third quarter, compared with a loss of $37.6 million, or 52 cents per share, during the same quarter last year.

Excluding special compensation from a principals agreement, the company's net loss was $2 million.

Analysts polled by Thomson Reuters, on average, forecast earnings of 10 cents per share for the quarter on revenue of $164.7 million. Analysts do not always include special charges in their estimates.

Revenue fell 25 percent to $185.1 million from $247.3 million during the year-ago period.

Fortress' loss grew and revenue shrank as incentive income fell sharply. Incentive income is revenue generated from the performance of the company's funds. Incentive income fell to $718,000 during the quarter ended Sept. 30, compared with $106.7 million during the same quarter last year.

Increased market volatility and sharp declines sent the value of many investments lower throughout the quarter as investors grappled with the ongoing credit crisis.

Management fees increased during the quarter by 23 percent to $154.3 million, accounting for the bulk of quarterly revenue.

Rising expenses also pushed Fortress' losses higher during the quarter as compensation and benefits costs increased. Fortress' total expenses increased to $410.2 million from $360.7 million.

The bulk of the increase was due to a jump in compensation and benefits costs, which rose to $134.8 million from $101.7 million during the year-ago quarter.