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Main Street (MAIN) Q2 Earnings As Expected, Expenses Down

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Main Street Capital Corporation’s (MAIN - Free Report) second-quarter 2020 net investment income of 48 cents per share came in line with the Zacks Consensus Estimate. The bottom line fell 23.8% from the year-ago figure.

The company’s second-quarter results were unfavorably impacted by lower total investment income. Also, decrease in net asset value and decline in investment portfolio were headwinds. However, fall in operating expenses acted as a positive.

Distributional net operating income came in at $34.1 million compared with the prior-year quarter’s $42 million.

Total Investment Income Declines, Expenses Down

Total investment income was $31.3 million, down 21% from the year-ago quarter. Lower dividend income from investment portfolio equity investments resulted in this decline. The top-line figure also lagged the Zacks Consensus Estimate of $49 million.

Total expenses declined 4.6% year over year to $20.7 million. Lower interest expenses, along with compensation and general and administrative costs, led to this fall.

The fair value of Main Street’s total investment portfolio was $2.42 billion as of Jun 30, 2020.

Balance Sheet Position

As of Jun 30, 2020, Main Street’s net asset value (NAV) was $20.85 per share compared with $23.91 on Dec 31, 2019.

As of Jun 30, 2020, the company had $68.5 million in cash and cash equivalents, $425 million of unused capacity under Credit Facility, with which it seeks to support investment and operating activities. Also, it had $35.2 million of remaining SBIC debenture capacity.

Our Take

Steady improvement in total investment income and strong origination volume are anticipated to support this Zacks Rank #3 (Hold) company’s bottom-line growth. Moreover, controlled expenses are a tailwind. However, decline in NAV is a major drag.
 
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Finance Stocks

LendingTree (TREE - Free Report) recorded second-quarter 2020 adjusted net income per share of 46 cents, missing the Zacks Consensus Estimate of 61 cents. Further, the figure came in lower than the prior-year quarter’s $1.18 per share.

First Horizon National Corporation (FHN - Free Report) delivered second-quarter 2020 adjusted earnings per share of 20 cents, missing the Zacks Consensus Estimate of 21 cents. The bottom-line figure was also 52.4% lower than the year-ago figure.

BOK Financial (BOKF - Free Report) reported a negative earnings surprise of 21.4% for the June-end quarter. Earnings per share of 92 cents lagged the Zacks Consensus Estimate of $1.17. In addition, the bottom line compared unfavorably with the prior-year quarter’s $1.93.

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