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What's in the Cards for Ares Capital (ARCC) in Q1 Earnings?
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Ares Capital Corporation (ARCC - Free Report) is scheduled to announce first-quarter 2019 results on Apr 30, before the market opens. Its revenues and earnings are projected to grow year over year.
In the last reported quarter, the company’s bottom line surpassed the Zacks Consensus Estimate. Results benefited from an increase in total investment income and healthy portfolio activity. Moreover, lower expenses were a tailwind.
In fact, the company has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three and met in one of the trailing four quarters, the average beat being 6.9%.
However, activities of the company in the first quarter failed to win analysts’ confidence. As a result, the consensus estimate for earnings of 42 cents has remained unchanged over the past 30 days. Nonetheless, it reflects a year-over-year improvement of 7.7%.
Further, the Zacks Consensus Estimate for sales of $336.4 million reflects growth of 6.1% on a year-over-year basis.
Before we take a look at what our quantitative model predicts for the to-be-reported quarter, let’s check the factors that are likely to impact the results.
Factors to Impact Q1 Results
Given the expectation of higher prepayment activity during the first quarter, total investment income is likely to be positively impacted. Also, with the increase in LIBOR rates, Ares Capital’s floating-rate debt investments, which are tied to LIBOR, are likely to support investment income.
However, the company has been witnessing higher expenses over the past several quarters. As Ares Capital continues to invest in the venture growth stage companies, operating expenses are likely to remain elevated.
Earnings Whispers
According to our quantitative model, it cannot be conclusively predicted whether Ares Capital will be able to beat the Zacks Consensus Estimate this time. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Ares Capital has an Earnings ESP of 0.00%.
Zacks Rank: The company currently carries a Zacks Rank #3. While this increases the predictive power of ESP, we also need a positive ESP to be confident of an earnings beat.
Stocks That Warrant a Look
Here are some finance stocks that you may want to consider, as according to our model, these have the right combination of elements to post an earnings beat this quarter.
Solar Capital Ltd. (SLRC - Free Report) has an Earnings ESP of +4.07% and currently carries a Zacks Rank #2 (Buy). The company is slated to release results on May 6.
Grupo Financiero Galicia S.A. (GGAL - Free Report) is expected to release results on May 29. It presently has an Earnings ESP of +4.76% and a Zacks Rank #3.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
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What's in the Cards for Ares Capital (ARCC) in Q1 Earnings?
Ares Capital Corporation (ARCC - Free Report) is scheduled to announce first-quarter 2019 results on Apr 30, before the market opens. Its revenues and earnings are projected to grow year over year.
In the last reported quarter, the company’s bottom line surpassed the Zacks Consensus Estimate. Results benefited from an increase in total investment income and healthy portfolio activity. Moreover, lower expenses were a tailwind.
In fact, the company has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three and met in one of the trailing four quarters, the average beat being 6.9%.
Ares Capital Corporation Price and EPS Surprise
Ares Capital Corporation Price and EPS Surprise | Ares Capital Corporation Quote
However, activities of the company in the first quarter failed to win analysts’ confidence. As a result, the consensus estimate for earnings of 42 cents has remained unchanged over the past 30 days. Nonetheless, it reflects a year-over-year improvement of 7.7%.
Further, the Zacks Consensus Estimate for sales of $336.4 million reflects growth of 6.1% on a year-over-year basis.
Before we take a look at what our quantitative model predicts for the to-be-reported quarter, let’s check the factors that are likely to impact the results.
Factors to Impact Q1 Results
Given the expectation of higher prepayment activity during the first quarter, total investment income is likely to be positively impacted. Also, with the increase in LIBOR rates, Ares Capital’s floating-rate debt investments, which are tied to LIBOR, are likely to support investment income.
However, the company has been witnessing higher expenses over the past several quarters. As Ares Capital continues to invest in the venture growth stage companies, operating expenses are likely to remain elevated.
Earnings Whispers
According to our quantitative model, it cannot be conclusively predicted whether Ares Capital will be able to beat the Zacks Consensus Estimate this time. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Ares Capital has an Earnings ESP of 0.00%.
Zacks Rank: The company currently carries a Zacks Rank #3. While this increases the predictive power of ESP, we also need a positive ESP to be confident of an earnings beat.
Stocks That Warrant a Look
Here are some finance stocks that you may want to consider, as according to our model, these have the right combination of elements to post an earnings beat this quarter.
Axos Financial, Inc. (AX - Free Report) is slated to release results on Apr 30. It has an Earnings ESP of +0.26% and currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Solar Capital Ltd. (SLRC - Free Report) has an Earnings ESP of +4.07% and currently carries a Zacks Rank #2 (Buy). The company is slated to release results on May 6.
Grupo Financiero Galicia S.A. (GGAL - Free Report) is expected to release results on May 29. It presently has an Earnings ESP of +4.76% and a Zacks Rank #3.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>