Hercules Capital Inc.’s (HTGC - Free Report) third-quarter 2019 net investment income of 37 cents per share outpaced the Zacks Consensus Estimate of 34 cents. The bottom line grew 19.4% from the year-ago figure.
Results benefited from higher total investment income and an increase in net asset. However, rise in operating expenses acted as a headwind.
Distributional net operating income was $40.3 million or 39 cents per share, up from $32.6 million or 34 cents per share in the prior-year quarter.
Total Investment Income Improves, Expenses Rise
Total investment income was $69.2 million, up 31.6% from the year-ago quarter. The upside was mainly driven by a higher average debt investment balance and rise in income from acceleration from early loan repayments. The top line beat the Zacks Consensus Estimate of $67.5 million.
Total operating expenses jumped 30.3% year over year to $30.4 million. The increase mainly resulted from higher interest expenses, general and administrative costs, and total employee-compensation costs.
Total Portfolio Value & New Commitments
The fair value of Hercules Capital’s total investment portfolio was $2.2 billion as of Sep 30, 2019.
In the reported quarter, the company provided $241.3 million in new debt and equity commitments.
Balance Sheet Position
As of Sep 30, 2019, Hercules Capital’s net asset value was $10.38 per share compared with $9.90 on Dec 31, 2018.
The company had $284.5 million in liquidity, including $21.1 million in unrestricted cash and cash equivalents, and $263.4 million in credit facilities, as of Sep 30, 2019.
At the end of the third quarter, the weighted average cost of debt, comprising interest and fees, was 5.1%, down from 5.6% from the prior-year quarter end.
Hercules Capital’s loan origination activity continues to be on track. However, elevated expense levels might hurt the bottom line to some extent.
Currently, Hercules Capital 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 Dates of Other Finance Stocks
Ares Capital Corporation’s (ARCC - Free Report) third-quarter 2019 core earnings of 48 cents per share surpassed the Zacks Consensus Estimate of 46 cents. Also, the bottom line rose 6.7% from the year-ago quarter.
Capitala Finance Corp. (CPTA - Free Report) and FS KKR Capital Corp. (FSK - Free Report) are scheduled to announce results on Nov 4 and Nov 7, respectively.
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