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Main Street (MAIN) Q2 Earnings As Expected, Expenses Down

Zacks Equity Research
·3 mins read

Main Street Capital Corporation’s MAIN second-quarter 2020 net investment income of 48 cents per share came in line with the Zacks Consensus Estimate. The bottom line fell 23.8% from the year-ago figure.

The company’s second-quarter results were unfavorably impacted by lower total investment income. Also, decrease in net asset value and decline in investment portfolio were headwinds. However, fall in operating expenses acted as a positive.

Distributional net operating income came in at $34.1 million compared with the prior-year quarter’s $42 million.

Total Investment Income Declines, Expenses Down

Total investment income was $31.3 million, down 21% from the year-ago quarter. Lower dividend income from investment portfolio equity investments resulted in this decline. The top-line figure also lagged the Zacks Consensus Estimate of $49 million.

Total expenses declined 4.6% year over year to $20.7 million. Lower interest expenses, along with compensation and general and administrative costs, led to this fall.

The fair value of Main Street’s total investment portfolio was $2.42 billion as of Jun 30, 2020.

Balance Sheet Position

As of Jun 30, 2020, Main Street’s net asset value (NAV) was $20.85 per share compared with $23.91 on Dec 31, 2019.

As of Jun 30, 2020, the company had $68.5 million in cash and cash equivalents, $425 million of unused capacity under Credit Facility, with which it seeks to support investment and operating activities. Also, it had $35.2 million of remaining SBIC debenture capacity.

Our Take

Steady improvement in total investment income and strong origination volume are anticipated to support this Zacks Rank #3 (Hold) company’s bottom-line growth. Moreover, controlled expenses are a tailwind. However, decline in NAV is a major drag.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Main Street Capital Corporation Price, Consensus and EPS Surprise

Main Street Capital Corporation Price, Consensus and EPS Surprise
Main Street Capital Corporation Price, Consensus and EPS Surprise

Main Street Capital Corporation price-consensus-eps-surprise-chart | Main Street Capital Corporation Quote

Performance of Other Finance Stocks

LendingTree TREE recorded second-quarter 2020 adjusted net income per share of 46 cents, missing the Zacks Consensus Estimate of 61 cents. Further, the figure came in lower than the prior-year quarter’s $1.18 per share.

First Horizon National Corporation FHN delivered second-quarter 2020 adjusted earnings per share of 20 cents, missing the Zacks Consensus Estimate of 21 cents. The bottom-line figure was also 52.4% lower than the year-ago figure.

BOK Financial BOKF reported a negative earnings surprise of 21.4% for the June-end quarter. Earnings per share of 92 cents lagged the Zacks Consensus Estimate of $1.17. In addition, the bottom line compared unfavorably with the prior-year quarter’s $1.93.

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