Back to top

Image: Bigstock

Capitala Finance (CPTA) Q2 Earnings In Line, Costs Fall

Read MoreHide Full Article

Capitala Finance Corp.’s second-quarter 2019 net investment income per share of 25 cents was in line with the Zacks Consensus Estimate. The figure was 3.8% lower than the prior-year quarter’s number.

Results were hurt by lower total investment income. However, a decline in expenses provided some support. The company’s portfolio activity remained strong.

Total Investment Income Falls, Expenses Decline

Total investment income amounted to $11.6 million, down 2.5% year over year. This decline was primarily due to a fall in total interest income, fee income and total payment-in-kind interest income. Moreover, the figure missed the Zacks Consensus Estimate of $12.5 million.

Total expenses decreased 1.1% year over year to $7.6 million. This decline was due to a fall in interest and financing expenses, and management fees.

Balance Sheet Position

As of Jun 30, 2019, the company’s cash and cash equivalents totaled $43.5 million, up from $39.3 million as of Dec 31, 2018.  Total assets amounted to $437.3 million, down from $493.2 million as of Dec 31, 2018.

Further, net asset value was $9.55 per share, down from $11.88 at the end of December.

Portfolio Activities

During the second quarter, the company originated $13.8 million of new investments. Of this, $13.4 million were debt investments and the remaining was in equity securities.

Our Take

Driven by the rise in demand for financing, the company’s investment income is expected to grow in the near term. Moreover, lower expenses will likely aid profitability.

Capitala Finance Corp. Price, Consensus and EPS Surprise
 

Capitala Finance Corp. Price, Consensus and EPS Surprise

Capitala Finance Corp. price-consensus-eps-surprise-chart | Capitala Finance Corp. Quote

Currently, Capitala Finance carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance & Earnings Release Date of Other Finance Stocks

Ares Capital Corporation’s (ARCC - Free Report) second-quarter 2019 core earnings of 49 cents per share surpassed the Zacks Consensus Estimate of 44 cents. Also, the bottom line grew 25.6% from the year-ago quarter.

Hercules Capital Inc.’s (HTGC - Free Report) second-quarter 2019 net investment income of 36 cents per share outpaced the Zacks Consensus Estimate of 33 cents. The bottom line also was 38.5% above the year-ago figure.

FS KKR Capital Corp. (FSK - Free Report) is scheduled to announce results on Aug 7.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Ares Capital Corporation (ARCC) - free report >>

Hercules Capital, Inc. (HTGC) - free report >>

FS KKR Capital Corp. (FSK) - free report >>

Published in