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Why is Q3 Earnings Beat Less Likely for Ares Capital (ARCC)?
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Ares Capital Corporation (ARCC - Free Report) is scheduled to announce third-quarter 2022 results on Oct 25, before market open. Its revenues and earnings are anticipated to have improved in the quarter on a year-over-year basis.
In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results reflected an improvement in total investment income, lower expenses and solid portfolio activity.
Ares Capital has an impressive earnings surprise history. The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 4.2%.
The Zacks Consensus Estimate for ARCC’s third-quarter earnings is pegged at 50 cents, which has been unchanged over the past seven days. The figure indicates a rise of 6.4% from the year-ago quarter’s reported number. Our estimate for earnings is 48 cents, which implies a year-over-year rise of 20.1%.
The consensus estimate for sales of $511.4 million suggests 15.7% growth on a year-over-year basis. Our estimate for sales is $507.8 million, implying growth of 14.9% from the prior-year quarter’s reported number.
Other Key Estimates for Q3
The Zacks Consensus Estimate for interest income from investments (constituting a significant portion of the company’s total investment income) is pegged at $359 million, indicating a 13.2% rise from the prior-year quarter’s reported figure. Our estimate for the same is $345.7 million, suggesting a year-over-year rise of 9.1%.
The consensus estimate for capital structuring service fees is pegged at $45.78 million, suggesting a 22.4% year-over-year decline. The Zacks Consensus Estimate for dividend income of $97 million indicates a rise of 79.6% from the prior-year quarter. Our estimate for dividend income is $87.8 million, indicating growth of 62.6%.
The consensus estimate for other income is pegged at $12.18 million, suggesting a rise of 1.5% from the prior-year quarter’s reported figure. Our estimate for the same is $12.4 million, suggesting growth of 3.5%.
Ares Capital has been witnessing higher expenses over the past several quarters. As it has been investing in venture growth stage companies, operating expenses are expected to have been elevated in the third quarter.
ARCC expected its third-quarter core earnings to gain 8 cents per share or witness a sequential rise of 17% if market rates increased 100 bps from the Jun 30 levels. Our estimate for core earnings is pegged at 59 cents per share.
Earnings Whispers
According to our quantitative model, the chances of Ares Capital beating the Zacks Consensus Estimate this time are low. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Ares Capital has an Earnings ESP of -3.03%.
Zacks Rank: The company currently carries a Zacks Rank #2 (Buy).
Finance Stocks That Warrant a Look
A few finance stocks, which you may want to consider, as these have the right combination of elements to post an earnings beat in their upcoming releases per our model, are Stock Yards Bancorp, Inc. (SYBT - Free Report) and Ares Management (ARES - Free Report) .
The Earnings ESP for Stock Yards Bancorp is +2.15%. SYBT sports a Zacks Rank #1 (Strong Buy) at present. The company is expected to report results on Oct 26. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ares Management is scheduled to release quarterly results on Oct 27. ARES currently has a Zacks Rank #3 and an Earnings ESP of +5.04%.
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Why is Q3 Earnings Beat Less Likely for Ares Capital (ARCC)?
Ares Capital Corporation (ARCC - Free Report) is scheduled to announce third-quarter 2022 results on Oct 25, before market open. Its revenues and earnings are anticipated to have improved in the quarter on a year-over-year basis.
In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results reflected an improvement in total investment income, lower expenses and solid portfolio activity.
Ares Capital has an impressive earnings surprise history. The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 4.2%.
Ares Capital Corporation Price and EPS Surprise
Ares Capital Corporation price-eps-surprise | Ares Capital Corporation Quote
Earnings & Sales Projections for Q3
The Zacks Consensus Estimate for ARCC’s third-quarter earnings is pegged at 50 cents, which has been unchanged over the past seven days. The figure indicates a rise of 6.4% from the year-ago quarter’s reported number. Our estimate for earnings is 48 cents, which implies a year-over-year rise of 20.1%.
The consensus estimate for sales of $511.4 million suggests 15.7% growth on a year-over-year basis. Our estimate for sales is $507.8 million, implying growth of 14.9% from the prior-year quarter’s reported number.
Other Key Estimates for Q3
The Zacks Consensus Estimate for interest income from investments (constituting a significant portion of the company’s total investment income) is pegged at $359 million, indicating a 13.2% rise from the prior-year quarter’s reported figure. Our estimate for the same is $345.7 million, suggesting a year-over-year rise of 9.1%.
The consensus estimate for capital structuring service fees is pegged at $45.78 million, suggesting a 22.4% year-over-year decline. The Zacks Consensus Estimate for dividend income of $97 million indicates a rise of 79.6% from the prior-year quarter. Our estimate for dividend income is $87.8 million, indicating growth of 62.6%.
The consensus estimate for other income is pegged at $12.18 million, suggesting a rise of 1.5% from the prior-year quarter’s reported figure. Our estimate for the same is $12.4 million, suggesting growth of 3.5%.
Ares Capital has been witnessing higher expenses over the past several quarters. As it has been investing in venture growth stage companies, operating expenses are expected to have been elevated in the third quarter.
ARCC expected its third-quarter core earnings to gain 8 cents per share or witness a sequential rise of 17% if market rates increased 100 bps from the Jun 30 levels. Our estimate for core earnings is pegged at 59 cents per share.
Earnings Whispers
According to our quantitative model, the chances of Ares Capital beating the Zacks Consensus Estimate this time are low. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Ares Capital has an Earnings ESP of -3.03%.
Zacks Rank: The company currently carries a Zacks Rank #2 (Buy).
Finance Stocks That Warrant a Look
A few finance stocks, which you may want to consider, as these have the right combination of elements to post an earnings beat in their upcoming releases per our model, are Stock Yards Bancorp, Inc. (SYBT - Free Report) and Ares Management (ARES - Free Report) .
The Earnings ESP for Stock Yards Bancorp is +2.15%. SYBT sports a Zacks Rank #1 (Strong Buy) at present. The company is expected to report results on Oct 26. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ares Management is scheduled to release quarterly results on Oct 27. ARES currently has a Zacks Rank #3 and an Earnings ESP of +5.04%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.