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Owl Rock Capital (ORCC) Q4 Earnings Beat Mark, Jump Y/Y

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Owl Rock Capital Corporation (ORCC - Free Report) reported fourth-quarter 2021 earnings per share of 35 cents, beating the Zacks Consensus Estimate of 33 cents on the back of higher investment income. The figure also increased from the year-ago quarter’s earnings of 29 cents per share.

In the quarter, the company’s total investment income was $281.6 million, up from the year-ago level of $221.3 million. The figure also beat the consensus mark of $268 million. An increase in the debt investment portfolio benefited the metric, which was partially offset by a decline in the portfolio's weighted average yield.

The strong fourth-quarter results were supported by higher income from interest, dividends, and other sources from non-controlled and non-affiliated investments. Also, better new investment commitments in the fourth quarter benefited the results.

Operating Details

Fourth-quarter total new investment commitments were $1,589.2 million, up from $1,527.4 million a year ago. Total new investment commitments for the full-year 2021 were $6,824.8 million across 67 new portfolio companies, up 98.1% year over year.

Owl Rock concluded the fourth quarter with investments in 143 portfolio companies, with an aggregate fair value of $12.7 billion. The average investment size in each portfolio company was $89.1 million (based on fair value) as of Dec 31, 2021.

Total expenses of $143.8 million in the fourth quarter rose from $106.7 million due to higher interest expenses, management fees, performance-based incentive fees and other operating expenses.

The company’s interest expenses of $60.1 million increased from $42.4 million due to higher average daily borrowings. However, the same was partly offset by a reduced average interest rate.

Net income for the fourth quarter was $174 million, down from $180.7 million a year ago due to lower net realized gains.

Dividend Update

Owl Rock declared a first-quarter dividend of 31 cents per share for its shareholders of record on Mar 31, 2022. The amount will be paid out on or before May 13.

Financial Update (as of Dec 31, 2021)

Owl Rock had cash and restricted cash worth $447.1 million at the end of the fourth quarter, sequentially down from $794.7 million.

The company exited the fourth quarter with $7.2 billion of debt, up from $7 billion at third-quarter end. Owl Rock Capital had $1.4 billion of undrawn capacity under its credit facilities. It currently has no debt maturities until December 2023.

It had total assets worth $13.3 billion, up 17.6% from the level at 2020 end.

Zacks Rank

ORCC currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Some Other Firms

Of the Finance space players that have reported fourth-quarter results so far, Aflac Incorporated (AFL - Free Report) , Aon plc (AON - Free Report) and MetLife, Inc. (MET - Free Report) beat the Zacks Consensus Estimate for earnings.

Aflac Incorporated reported fourth-quarter 2021 adjusted earnings per share of $1.28.

AFL’s earnings surpassed the Zacks Consensus Estimate by 2.4% on the back of improved variable investment income from alternative investments. The uptick in sales across both the Aflac Japan and Aflac U.S. segments, coupled with reduced acquisition and operating expenses, contributed to the upside.

AON reported fourth-quarter 2021 operating earnings of $3.71 per share.

Aon’s earnings outpaced the Zacks Consensus Estimate by 9.1% on solid contributions from its Reinsurance Solutions, Commercial Risk Solutions, Health Solutions and Wealth Solutions segments. Also, decreased operating expenses benefited AON’s bottom line.

MetLife reported fourth-quarter 2021 adjusted operating earnings of $2.39 per share.

MET’s earnings surpassed the Zacks Consensus Estimate by 52.8% thanks to solid contributions from its MetLife Holdings, Latin America and Asia businesses. Lower expenses also aided MetLife’s earnings.

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