UPDATE 2-Blackstone beats estimates, sets payout; shares up

* Loss 7 cents/share

* Average Wall Street estimate loss 10 cents

* Sets payout of 30 cents/share

* Shares jump 10 pct (Adds comments from conference call in paragraphs 2,3, 7-9, 13; adds share rise and byline)

By Megan Davies

NEW YORK, May 6 (Reuters) - Private equity company Blackstone Group LP (BX.N) reported a quarterly loss Wednesday and said its ability to do leveraged deals was still limited, but it topped Wall Street forecasts and paid a full quarterly distribution of 30 cents a share, sending its shares up 10 percent.

Blackstone's chief operating officer, Tony James, said on a conference call the company should be able to make a full distribution of $1.20 per share this year, absent any big surprises.

"The world is an uncertain place right now," James said. "We believe that we'll have the fee-related earnings ... to make the dividend for the full $1.20. But we're also pretty pessimistic about the world."

Blackstone reported a first-quarter loss of $93 million before income taxes, noncash charges for vesting equity-based compensation, and amortization of intangible assets -- a measure it calls "economic net income" (ENI). That compared with a loss of $94 million a year earlier.

On an after-tax basis, it reported a ENI loss of 7 cents a share, compared with a loss of 6 cents a year earlier. Analysts polled by Reuters had expected, on average, a loss of 10 cents per share.

Blackstone prefers to focus on ENI because of the big payouts associated with its more than $4 billion initial public offering in June 2007.

James said the company wrote down the value of its private equity portfolio by 3 percent in the quarter, and wrote down the value of its real estate portfolio by 19 percent.

Private equity firms are obliged to value their companies as if they were to sell them today, rather than years in the future.

James said Blackstone has about $27 billion of "dry powder," meaning capital available to invest. He added that it has commitments from investors of about $8 billion for its sixth buyout fund, which it is in the process of raising.

LEVERAGE SCARCE

Blackstone has been hit by the financial crisis and shutdown of the credit markets. A revival in leverage is vital for the New York-based firm to be able to do deals of any significant scale and sell off current investments.