Prospect Capital Corporation (PSEC - Free Report) is slated to report fourth quarter and fiscal 2019 (ended Jun 30) results on Aug 27, after market close. Its quarterly revenues and earnings are projected to decline year over year.
In the last reported quarter, the company’s earnings were in line with the Zacks Consensus Estimate. Results benefited from an increase in total investment income while higher expenses were on the downside.
The company has a decent earnings surprise history, with the average beat of 4.9%.
Activities of the company in the fiscal fourth quarter were inadequate to win analysts’ confidence. As a result, the consensus estimate for earnings of 20 cents remained unchanged over the past seven days. It indicates a fall of 9.1% from the year-ago reported figure. Further, the Zacks Consensus Estimate for sales of $166.7 million suggests a decrease of 4.2%.
Before we take a look at what our quantitative model predicts for the fiscal fourth quarter, let’s check the factors that are likely to impact the results.
Factors to Influence Q4 Results
Given the expectations of higher prepayment activity during the to-be-reported quarter, total investment income is likely to be positively impacted. However, with the recent contraction in the LIBOR rates, Prospect Capital’s floating-rate debt investments that are tied to LIBOR are likely to hurt investment income to some extent.
The company has been witnessing higher expenses over the past several quarters. As Prospect Capital continues to invest in the venture growth stage companies, operating expenses are likely to remain elevated.
According to our quantitative model, it cannot be conclusively predicted whether Prospect 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: Prospect Capital has an Earnings ESP of 0.00%.
Zacks Rank: Prospect Capital currently carries a Zacks Rank #3. While this increases the predictive power of ESP, we also need a positive Earnings ESP to be sure of an earnings beat.
Stocks to Consider
The Zacks Consensus Estimate for T. Rowe Price (TROW - Free Report) has remained stable for 2019 in the past seven days. Shares of this Zacks Rank #1 company have returned 14.4% year to date.
The Zacks Consensus Estimate for Ameriprise Financial (AMP - Free Report) has been marginally raised for 2019 in the past 30 days. Its share price has risen 19.3% so far this year. The stock carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Federated Investors (FII - Free Report) has been revised slightly upward for 2019 in the past 30 days. The company’s share price has rallied 20% so far this year. The company has a Zacks Rank of 2.
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 >>