Apollo Investment Corporation’s second-quarter fiscal 2022 (ended Sep 30) net investment income of 33 cents per share missed the Zacks Consensus Estimate of 36 cents. The bottom line also declined 23.3% year over year.
The results were hurt by lower total investment income and a rise in expenses. On the other hand, robust gross fundings and decent portfolio activities acted as tailwinds. This perhaps boosted investor sentiments as the company’s shares gained 1.3% since the earnings release late last week.
Net investment income was $21.2 million, down 24% from the prior-year quarter.
Total Investment Income Down, Expenses Up
Total investment income was $52.9 million, down 3.7% year over year. The fall was mainly due to lower interest income.
Total expenses, net of performance-based incentive fee offset and expense reimbursements, rose 17.3% to $31.7 million.
Solid Balance Sheet Position
As of Sep 30, 2021, the company’s cash and cash equivalents (including foreign currencies) totaled $27.5 million, down from $54.6 million on Mar 31, 2021.
As of Sep 30, 2021, Apollo Investment had $1.6 billion of debt obligations. This included $350 million of Senior Unsecured Notes, $125 million of Unsecured Notes, and $1.13 billion outstanding under the credit facility.
Apollo Investment’s total assets amounted to $2.69 billion, up from $2.54 billion as of Mar 31, 2021.
Net asset value was $16.07 per share, up from $15.88 as of March 2021-end.
Decent Portfolio Activity
The fair value of Apollo Investment’s total investment portfolio was $2.61 billion as of Sep 30, 2021.
In the quarter, gross fundings were $290.1 million while gross exits totaled $176 million. New investment commitments of $222 million were made during the quarter.
Share Repurchase Update
During the quarter, Apollo Investment repurchased 0.45 million shares for $5.9 million.
Further, subsequent to quarter-end through Nov 3, the company repurchased 0.31 million shares for $4.1 million.
Our View
Continued decent origination volumes are expected to support Apollo Investment’s financials. Elevated expenses are likely to hurt the bottom line to some extent.
Currently, Apollo Investment carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Finance Stocks
Hercules Capital Inc.’s (HTGC - Free Report) third-quarter 2021 net investment income of 33 cents per share beat the Zacks Consensus Estimate by a penny. The bottom line was 2.9% down from the year-ago quarter figure.
Ares Capital Corporation’s (ARCC - Free Report) third-quarter 2021 core earnings of 47 cents per share beat the Zacks Consensus Estimate of 45 cents. The bottom line reflected a rise of 20.5% from the prior-year quarter.
TriplePoint Venture Growth BDC Corp.’s (TPVG - Free Report) third-quarter 2021 net investment income was 32 cents per share, missing the Zacks Consensus Estimate of 35 cents. The bottom line also declined 20% from the year-ago quarter.
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Apollo Investment Corporation’s second-quarter fiscal 2022 (ended Sep 30) net investment income of 33 cents per share missed the Zacks Consensus Estimate of 36 cents. The bottom line also declined 23.3% year over year.
The results were hurt by lower total investment income and a rise in expenses. On the other hand, robust gross fundings and decent portfolio activities acted as tailwinds. This perhaps boosted investor sentiments as the company’s shares gained 1.3% since the earnings release late last week.
Net investment income was $21.2 million, down 24% from the prior-year quarter.
Total Investment Income Down, Expenses Up
Total investment income was $52.9 million, down 3.7% year over year. The fall was mainly due to lower interest income.
Total expenses, net of performance-based incentive fee offset and expense reimbursements, rose 17.3% to $31.7 million.
Solid Balance Sheet Position
As of Sep 30, 2021, the company’s cash and cash equivalents (including foreign currencies) totaled $27.5 million, down from $54.6 million on Mar 31, 2021.
As of Sep 30, 2021, Apollo Investment had $1.6 billion of debt obligations. This included $350 million of Senior Unsecured Notes, $125 million of Unsecured Notes, and $1.13 billion outstanding under the credit facility.
Apollo Investment’s total assets amounted to $2.69 billion, up from $2.54 billion as of Mar 31, 2021.
Net asset value was $16.07 per share, up from $15.88 as of March 2021-end.
Decent Portfolio Activity
The fair value of Apollo Investment’s total investment portfolio was $2.61 billion as of Sep 30, 2021.
In the quarter, gross fundings were $290.1 million while gross exits totaled $176 million. New investment commitments of $222 million were made during the quarter.
Share Repurchase Update
During the quarter, Apollo Investment repurchased 0.45 million shares for $5.9 million.
Further, subsequent to quarter-end through Nov 3, the company repurchased 0.31 million shares for $4.1 million.
Our View
Continued decent origination volumes are expected to support Apollo Investment’s financials. Elevated expenses are likely to hurt the bottom line to some extent.
Currently, Apollo Investment carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Finance Stocks
Hercules Capital Inc.’s (HTGC - Free Report) third-quarter 2021 net investment income of 33 cents per share beat the Zacks Consensus Estimate by a penny. The bottom line was 2.9% down from the year-ago quarter figure.
Ares Capital Corporation’s (ARCC - Free Report) third-quarter 2021 core earnings of 47 cents per share beat the Zacks Consensus Estimate of 45 cents. The bottom line reflected a rise of 20.5% from the prior-year quarter.
TriplePoint Venture Growth BDC Corp.’s (TPVG - Free Report) third-quarter 2021 net investment income was 32 cents per share, missing the Zacks Consensus Estimate of 35 cents. The bottom line also declined 20% from the year-ago quarter.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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