We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Blue Owl Capital Corporation (OBDC) Down 4.1% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
A month has gone by since the last earnings report for Blue Owl Capital Corporation (OBDC - Free Report) . Shares have lost about 4.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Blue Owl Capital Corporation due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Blue Owl Capital Q2 Earnings Beat, Revenues Rise Y/Y
Blue Owl Capital reported second-quarter 2023 earnings per share of 48 cents, which beat the Zacks Consensus Estimate by 4.4%. The bottom line also improved 50% year over year.
The total investment income of OBDC amounted to $394.2 million, which increased 44.3% year over year. The top line beat the Zacks Consensus Estimate by 2.6%.
Strong quarterly results of OBDC were supported by growth in the portfolio, increased interest rates and record net investment income. However, the positives were partially offset by higher costs.
Q2 Update
Net investment income increased 49.2% year over year to $186.7 million. The metric beat our estimate by 10.6%.
Total new investment commitments were $183 million across five new portfolio companies and six existing ones. The metric plunged 69.7% year over year in the quarter under review.
Blue Owl Capital ended the second quarter with investments in 187 portfolio companies, backed with an aggregate fair value of $12.9 billion. Based on the fair value, the average investment size in each portfolio company was $68.9 million as of Jun 30, 2023.
Total expenses escalated 40% year over year to $205.2 million in the second quarter. The metric was 2.1% higher than our estimate, primarily due to higher interest expenses, performance-based incentive fees and other general and administrative expenses.
The company recorded a net income of $195.6 million in the second quarter against $34.9 million loss in the prior-year quarter.
Financial Update (as of Jun 30, 2023)
Blue Owl Capital exited the second quarter with cash and restricted cash of $367.9 million, which declined from $445.1 million as of Dec 31, 2022. Total assets of $13.4 billion fell from $13.6 billion at 2022-end.
Debt was $7 billion, down from $7.3 billion at 2022-end. OBDC had $1.5 billion of undrawn capacity under its credit facilities.
Net cash from operating activities in the first half of 2023 was $542.8 million compared with the prior year’s figure of $74.7 million.
At the second-quarter end, net debt to equity was 1.14X compared with 1.19x at 2022-end.
Dividend & Repurchase Update
The board of directors at Blue Owl Capital declared a third-quarter 2023 dividend of 33 cents per share to be paid on or before Oct 13, 2023, to shareholders of record as of Sep 29. It also provided a second-quarter 2023 supplemental dividend of 7 cents per share.
OBDC brought in a share buyback program of $150 million on Nov 1, 2022, with a life span of 18 months. As of Jun 30, 2023, $75 million of OBDC stock was purchased, of which 66.6% was bought by OBDC at a price of $12.22 per share.
Outlook
Most of Blue Owl Capital’s assets are floating, so an improving interest rate environment is projected to drive net investment income. Included in Investment Income are Pre-Payment fees, which are expected to increase as the interest rate stabilizes, thereby increasing repayments.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
At this time, Blue Owl Capital Corporation has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Blue Owl Capital Corporation has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Blue Owl Capital Corporation (OBDC) Down 4.1% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Blue Owl Capital Corporation (OBDC - Free Report) . Shares have lost about 4.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Blue Owl Capital Corporation due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Blue Owl Capital Q2 Earnings Beat, Revenues Rise Y/Y
Blue Owl Capital reported second-quarter 2023 earnings per share of 48 cents, which beat the Zacks Consensus Estimate by 4.4%. The bottom line also improved 50% year over year.
The total investment income of OBDC amounted to $394.2 million, which increased 44.3% year over year. The top line beat the Zacks Consensus Estimate by 2.6%.
Strong quarterly results of OBDC were supported by growth in the portfolio, increased interest rates and record net investment income. However, the positives were partially offset by higher costs.
Q2 Update
Net investment income increased 49.2% year over year to $186.7 million. The metric beat our estimate by 10.6%.
Total new investment commitments were $183 million across five new portfolio companies and six existing ones. The metric plunged 69.7% year over year in the quarter under review.
Blue Owl Capital ended the second quarter with investments in 187 portfolio companies, backed with an aggregate fair value of $12.9 billion. Based on the fair value, the average investment size in each portfolio company was $68.9 million as of Jun 30, 2023.
Total expenses escalated 40% year over year to $205.2 million in the second quarter. The metric was 2.1% higher than our estimate, primarily due to higher interest expenses, performance-based incentive fees and other general and administrative expenses.
The company recorded a net income of $195.6 million in the second quarter against $34.9 million loss in the prior-year quarter.
Financial Update (as of Jun 30, 2023)
Blue Owl Capital exited the second quarter with cash and restricted cash of $367.9 million, which declined from $445.1 million as of Dec 31, 2022. Total assets of $13.4 billion fell from $13.6 billion at 2022-end.
Debt was $7 billion, down from $7.3 billion at 2022-end. OBDC had $1.5 billion of undrawn capacity under its credit facilities.
Net cash from operating activities in the first half of 2023 was $542.8 million compared with the prior year’s figure of $74.7 million.
At the second-quarter end, net debt to equity was 1.14X compared with 1.19x at 2022-end.
Dividend & Repurchase Update
The board of directors at Blue Owl Capital declared a third-quarter 2023 dividend of 33 cents per share to be paid on or before Oct 13, 2023, to shareholders of record as of Sep 29. It also provided a second-quarter 2023 supplemental dividend of 7 cents per share.
OBDC brought in a share buyback program of $150 million on Nov 1, 2022, with a life span of 18 months. As of Jun 30, 2023, $75 million of OBDC stock was purchased, of which 66.6% was bought by OBDC at a price of $12.22 per share.
Outlook
Most of Blue Owl Capital’s assets are floating, so an improving interest rate environment is projected to drive net investment income. Included in Investment Income are Pre-Payment fees, which are expected to increase as the interest rate stabilizes, thereby increasing repayments.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
At this time, Blue Owl Capital Corporation has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Blue Owl Capital Corporation has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.