Post Earnings Coverage as Apollo Surpassed Net Investment Income Expectations

Upcoming AWS Coverage on Oaktree Capital Group Post-Earnings Results

LONDON, UK / ACCESSWIRE / February 13, 2017 / Active Wall St. announces its post-earnings coverage on Apollo Investment Corp. (NASDAQ: AINV) ("Apollo"). The Company posted its third quarter fiscal 2017 financial results on February 06, 2017. The investment Company's portfolio grew by approximately $6 million on a net basis in the reported quarter. Register with us now for your free membership at:

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One of Apollo Investment's competitors within the Asset Management space, Oaktree Capital Group, LLC (NYSE: OAK), reported its Q4 and full year 2016 financial results on Tuesday, February 07, 2017. AWS will be initiating a research report on Oaktree Capital in the coming days.

Today, AWS is promoting its earnings coverage on AINV; touching on OAK. Get our free coverage by signing up to:

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Earnings Reviewed

For the period ended December 31, 2016, Apollo reported total investment income of $68.1 million, down compared to total investment income of $94.33 million in Q3 FY16. The Company's total investment income numbers also declined 1.4% on a q-o-q basis, primarily attributable to lower prepayment income, which was partially offset by higher dividend income. The Company's reported numbers came in below analysts' consensus of $69.7 million.

For Q3 FY17, Apollo's fee and payment income was $1.5 million compared to $3.8 million in Q2 FY17. The Company stated that higher fee income was more than offset by a decline in prepayment income. Apollo's dividend income for the reported quarter was $11.4 million, up from $8.5 million in the previous quarter. The Company stated that higher dividend income from Merx and one of its shipping investments offset a decline in income from its structured-product investments, as it is reducing the exposure to this asset class as part of Apollo's repositioning strategy.

For Q3 FY17, Apollo's net investment income was $36.35 million, or $0.17 per share, compared to $39.5 million, or $0.18 per share, for Q2 FY17, surpassing analysts' forecasts of $0.16 per share. For the reported quarter, the Company's net loss on the portfolio totaled $25 million compared to a net gain of $1.6 million for the prior quarter. Negative contributors to the performance for Q3 FY17 included Venoco and Solarplicity. Positive contributors to performance for Q3 FY17 included its investments in Spotted Hawk, MCF III, and Golden Bear.

Operating Results

Apollo's Q3 FY17 operating results had increased net assets by $11.3 million, or $0.05 per share. Net asset value (NAV) per share declined $0.09, or 1.3% to $6.86 per share during the reported quarter compared to NAV of $6.95 per share in Q2 FY17, due to the loss in the portfolio offset by a $0.01 per share accretive impact to NAV from stock repurchases.

At the end of December 2016, Apollo had a fair value of $2.5 billion and consisted of 85 companies across 25 industries. The Company stated that first-lien debt represented 42% of the portfolio, second-lien debt represented 27%, unsecured debt represented 10%, structured credit 9%, and preferred and common equity represented 12%. The average weighted yield on the debt portfolio at cost was 10.9%, down slightly on a q-o-q basis.

Apollo had approximately $1 billion of debt outstanding at the end of Q2 FY17. During the reported quarter, the Company amended its revolving credit facility and extended the maturity to December 2021.

Share repurchase and Dividend

On September 15, 2016, Apollo announced that its Board of Directors expanded the Company's stock repurchase program by $50 million which increased the total amount available to be repurchased to $150 million. During the three months ended December 31, 2016, the Company repurchased 2,300,116 shares at a weighted average price per share of $5.90 inclusive of commissions, for a total cost of $13.6 million.

Since the inception of the share repurchase program and through February 03, 2017, the Company repurchased approximately 17.05 million, or 7.2% of initial share outstanding, at weighted average price per share of $5.89 inclusive of commissions, for a total cost of $100.4 million, leaving approximately $50 million remaining under the current program authorized by the Board.

On February 03, 2017, the Company's Board of Directors declared a distribution of $0.15 per share, payable on April 06, 2017 to shareholders of record as of March 21, 2017.

Stock Performance

On Friday, February 10, 2017, the stock closed the trading session at $6.12, rising 1.49% from its previous closing price of $6.03. A total volume of 915.76 thousand shares have exchanged hands. Apollo Investment's stock price advanced 3.51% in the last three months, 8.86% in the past six months, and 61.56% in the previous twelve months. Moreover, the stock gained 4.44% since the start of the year. The Company's stock has a dividend yield of 9.80% and market cap of $1.35 billion.

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SOURCE: Active Wall Street