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Capitala Finance (CPTA) Q4 Earnings & Revenues Lag Estimates
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Capitala Finance Corp.’s fourth-quarter 2019 net investment income per share of 12 cents missed the Zacks Consensus Estimate of 22 cents. The bottom line was 45.5% 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.
In2019, net investment income was 81 cents per share, which lagged the consensus estimate of 90 cents and was down 19% year over year.
Total Investment Income & Expenses Decline
Total investment income inthe quarter was $9.6 million, down 15% year over year. This decline was primarily due to a fall in interest and fee income and total payment-in-kind interest income. Also, the figure missed the Zacks Consensus Estimate of $10.8 million.
In 2019, total investment income declined 6.9% to $44 million. It also missed the consensus estimate of $45.2 million.
Total expenses decreased nearly 1% year over year to $7.7 million. This decline was due to a fall in base management fees.
Balance Sheet Position
As of Dec 31, 2019, cash and cash equivalents totaled $62.3 million, up from $39.3 million as of Dec 31, 2018. Total assets amounted to $427.3 million, down from $493.2 million as of Dec 31, 2018.
Further, net asset value was $9.14 per share, down from $11.88 at the end of December.
Portfolio Activities
During the fourth quarter, the company originated $29 million of new investments. Of this, $27.4 million were debt investments and the remaining was in equity securities.
Our Take
Driven by the rise in demand for financing, Capitala Finance’s investment income is expected to grow in the near term. Moreover, lower expenses are likely to aid profitability.
Capitala Finance Corp. Price, Consensus and EPS Surprise
Ares Capital Corporation’s (ARCC - Free Report) fourth-quarter 2019 core earnings of 45 cents per share met the Zacks Consensus Estimate and were in line with the year-ago quarter’s figure.
Hercules Capital Inc.’s (HTGC - Free Report) fourth-quarter 2019 net investment income of 38 cents per share outpaced the Zacks Consensus Estimate of 36 cents. The bottom line grew 18.8% from the year-ago quarter’s reported figure.
LendingClub Corporation’s (LC - Free Report) fourth-quarter 2019 adjusted earnings of 8 cents per share surpassed the Zacks Consensus Estimate of 5 cents. Also, the bottom line reflects improvement from loss of 5 cents in the prior-year quarter.
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Capitala Finance (CPTA) Q4 Earnings & Revenues Lag Estimates
Capitala Finance Corp.’s fourth-quarter 2019 net investment income per share of 12 cents missed the Zacks Consensus Estimate of 22 cents. The bottom line was 45.5% 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.
In2019, net investment income was 81 cents per share, which lagged the consensus estimate of 90 cents and was down 19% year over year.
Total Investment Income & Expenses Decline
Total investment income inthe quarter was $9.6 million, down 15% year over year. This decline was primarily due to a fall in interest and fee income and total payment-in-kind interest income. Also, the figure missed the Zacks Consensus Estimate of $10.8 million.
In 2019, total investment income declined 6.9% to $44 million. It also missed the consensus estimate of $45.2 million.
Total expenses decreased nearly 1% year over year to $7.7 million. This decline was due to a fall in base management fees.
Balance Sheet Position
As of Dec 31, 2019, cash and cash equivalents totaled $62.3 million, up from $39.3 million as of Dec 31, 2018. Total assets amounted to $427.3 million, down from $493.2 million as of Dec 31, 2018.
Further, net asset value was $9.14 per share, down from $11.88 at the end of December.
Portfolio Activities
During the fourth quarter, the company originated $29 million of new investments. Of this, $27.4 million were debt investments and the remaining was in equity securities.
Our Take
Driven by the rise in demand for financing, Capitala Finance’s investment income is expected to grow in the near term. Moreover, lower expenses are likely to aid profitability.
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 of Other Finance Stocks
Ares Capital Corporation’s (ARCC - Free Report) fourth-quarter 2019 core earnings of 45 cents per share met the Zacks Consensus Estimate and were in line with the year-ago quarter’s figure.
Hercules Capital Inc.’s (HTGC - Free Report) fourth-quarter 2019 net investment income of 38 cents per share outpaced the Zacks Consensus Estimate of 36 cents. The bottom line grew 18.8% from the year-ago quarter’s reported figure.
LendingClub Corporation’s (LC - Free Report) fourth-quarter 2019 adjusted earnings of 8 cents per share surpassed the Zacks Consensus Estimate of 5 cents. Also, the bottom line reflects improvement from loss of 5 cents in the prior-year quarter.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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