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Goldman Sachs BDC’s (GSBD - Free Report) second-quarter 2021 results failed to impress the markets as there hasn’t been any major price change since the earnings release late last week. Net investment income of 57 cents per share beat the Zacks Consensus Estimate of 48 cents. This included purchase discount amortization of 9 cents per share related to its merger with Goldman Sachs Middle Market Lending Corp in October 2020.
Results benefited from drastic improvement in total investment income. Rise in net asset value and solid investment portfolio balance also offered support. However, increase in operating expenses was headwind.
Net investment income was $58.2 million, up substantially from $18.2 million in the prior-year quarter.
Total Investment Income & Expenses Surge
Total investment income was $83.9 million, jumping significantly from $30.6 million in the year-ago quarter.
Total expenses surged substantially year over year to $35.6 million. Increase in all expense components led to the rise. During the quarter, the company recorded fee waivers of $10.2 million.
The fair value of Goldman Sachs BDC’s total investment portfolio was $3.2 billion as of Jun 30, 2021, consisting of investments in 114 portfolio companies across 37 industries.
In the reported quarter, the company made new investment commitments of $368.8 million in new debt and equity.
Strong Balance Sheet & Liquidity Position
As of Jun 30, 2021, Goldman Sachs BDC’s net asset value was $16.05 per share compared with $15.91 on Dec 31, 2020.
As of Jun 30, 2021, the company had $1.6 billion of total principal amount of debt outstanding. It comprised $583.6 million of outstanding borrowings under its senior secured revolving credit facility, $155 million of unsecured convertible notes and $360 million of unsecured notes due 2025, and $500 million of unsecured notes due 2026.
Also, Goldman Sachs BDC had $1.11 billion of availability under its senior secured revolving credit facility, and $119.9 million in cash and cash equivalents.
Our Take
Steady improvement in total investment income and strong origination volume are anticipated to support Goldman Sachs BDC. However, mounting expenses remain a major concern.
Goldman Sachs BDC, Inc. Price, Consensus and EPS Surprise
Ares Capital Corporation’s (ARCC - Free Report) second-quarter 2021 core earnings of 53 cents per share surpassed the Zacks Consensus Estimate of 43 cents. Moreover, the bottom line reflects a rise of 35.9% from the prior-year quarter’s reported number.
Hercules Capital Inc.’s (HTGC - Free Report) second-quarter 2021 net investment income of 32 cents per share was in line with the Zacks Consensus Estimate. The figure reflects no change from the year-ago quarter’s reported number.
Apollo Investment Corporation’s first-quarter fiscal 2022 (ended Jun 30) net investment income of 39 cents per share matched the Zacks Consensus Estimate. The bottom line declined 9.3% year over year.
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Goldman Sachs BDC (GSBD) Q2 Earnings Beat, Expenses Jump
Goldman Sachs BDC’s (GSBD - Free Report) second-quarter 2021 results failed to impress the markets as there hasn’t been any major price change since the earnings release late last week. Net investment income of 57 cents per share beat the Zacks Consensus Estimate of 48 cents. This included purchase discount amortization of 9 cents per share related to its merger with Goldman Sachs Middle Market Lending Corp in October 2020.
Results benefited from drastic improvement in total investment income. Rise in net asset value and solid investment portfolio balance also offered support. However, increase in operating expenses was headwind.
Net investment income was $58.2 million, up substantially from $18.2 million in the prior-year quarter.
Total Investment Income & Expenses Surge
Total investment income was $83.9 million, jumping significantly from $30.6 million in the year-ago quarter.
Total expenses surged substantially year over year to $35.6 million. Increase in all expense components led to the rise. During the quarter, the company recorded fee waivers of $10.2 million.
The fair value of Goldman Sachs BDC’s total investment portfolio was $3.2 billion as of Jun 30, 2021, consisting of investments in 114 portfolio companies across 37 industries.
In the reported quarter, the company made new investment commitments of $368.8 million in new debt and equity.
Strong Balance Sheet & Liquidity Position
As of Jun 30, 2021, Goldman Sachs BDC’s net asset value was $16.05 per share compared with $15.91 on Dec 31, 2020.
As of Jun 30, 2021, the company had $1.6 billion of total principal amount of debt outstanding. It comprised $583.6 million of outstanding borrowings under its senior secured revolving credit facility, $155 million of unsecured convertible notes and $360 million of unsecured notes due 2025, and $500 million of unsecured notes due 2026.
Also, Goldman Sachs BDC had $1.11 billion of availability under its senior secured revolving credit facility, and $119.9 million in cash and cash equivalents.
Our Take
Steady improvement in total investment income and strong origination volume are anticipated to support Goldman Sachs BDC. However, mounting expenses remain a major concern.
Goldman Sachs BDC, Inc. Price, Consensus and EPS Surprise
Goldman Sachs BDC, Inc. price-consensus-eps-surprise-chart | Goldman Sachs BDC, Inc. Quote
Currently, Goldman Sachs BDC 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
Ares Capital Corporation’s (ARCC - Free Report) second-quarter 2021 core earnings of 53 cents per share surpassed the Zacks Consensus Estimate of 43 cents. Moreover, the bottom line reflects a rise of 35.9% from the prior-year quarter’s reported number.
Hercules Capital Inc.’s (HTGC - Free Report) second-quarter 2021 net investment income of 32 cents per share was in line with the Zacks Consensus Estimate. The figure reflects no change from the year-ago quarter’s reported number.
Apollo Investment Corporation’s first-quarter fiscal 2022 (ended Jun 30) net investment income of 39 cents per share matched the Zacks Consensus Estimate. The bottom line declined 9.3% year over year.