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Goldman Sachs BDC (GSBD) Q2 Earnings As Expected, Costs Down

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Goldman Sachs BDC’s (GSBD - Free Report) second-quarter 2020 net investment income of 45 cents per share came in line with the Zacks Consensus Estimate. The bottom-line figure fell 4.3% 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, a drop in operating expenses acted as a positive.

Net investment income came in at $18.2 million compared with the prior-year quarter’s $19.1 million.

Total Investment Income Declines, Expenses Down

Total investment income was $30.6 million, down 20.3% from the year-ago quarter. Lower dividend and interest income resulted in this decline. The top-line figure also lagged the Zacks Consensus Estimate of $31.3 million.

Total expenses declined 24.9% year over year to $14.2 million. Lower interest and debt expenses mainly led to the decline.

The fair value of Goldman Sachs BDC’s total investment portfolio was $1.42 billion as of Jun 30, 2020.

Balance Sheet Position

As of Jun 30, 2020, Goldman Sachs BDC’s net asset value (NAV) was $15.14 per share compared with $16.75 as of Dec 31, 2019.

As of Jun 30, 2020, the company had $918.5 million of total principal amount of debt outstanding, comprising $403.5 million of outstanding borrowings under its senior secured revolving credit facility, $155 million of unsecured convertible notes and $360 million of unsecured notes.

Also, Goldman Sachs BDC had $391.7 million of availability under its senior secured revolving credit facility, and $105.8 million in cash and cash equivalents.

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. Nevertheless, decline in NAV is a major drag.
 

Goldman Sachs BDC, Inc. Price, Consensus and EPS Surprise

Goldman Sachs BDC, Inc. Price, Consensus and EPS Surprise

Goldman Sachs BDC, Inc. price-consensus-eps-surprise-chart | Goldman Sachs BDC, Inc. Quote

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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