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Prospect Capital (PSEC) Q4 Earnings Meet Estimates, Costs Down

Zacks Equity Research
·3 mins read

Prospect Capital Corporation’s PSEC fourth-quarter fiscal 2020 (ended Jun 30) net investment income per share of 16 cents was in line with the Zacks Consensus Estimate. The bottom line decreased 15.8% year over year.

Results benefited from a fall in operating expenses and decent origination volume. However, lower revenues and a decline in the value of the company’s investment portfolio were the undermining factors.

Net investment income for the quarter was $58.3 million, down 16.3% from the prior-year quarter.

For fiscal 2020, net investment income was $265.7 million or 72 cents per share, down from $312.9 million or 85 cents per share in fiscal 2019.

Total Investment Income & Expenses Decline

Total investment income for the reported quarter was $145.2 million, down 11.6% year over year. The fall was mainly due to lower dividend income and interest income. Nonetheless, the figure beat the Zacks Consensus Estimate of $141.1 million.

Total investment income for fiscal 2020 declined 11.4% year over year to $623.5 million. However, it beat the consensus estimate of $619.4 million.

Total operating expenses for the quarter were $87 million, down 8.2% year over year.

Total Portfolio Value & Originations

The fair value of Prospect Capital’s total investment portfolio was $5.23 billion as of Jun 30, 2020, down 7.5% year over year.

In the reported quarter, the company originated $36.6 million in new and follow-on investments.

Balance Sheet

As of Jun 30, 2020, Prospect Capital’s net asset value was $8.18 per share compared with $9.01 on Jun 30, 2019. Further, the company had $3.77 billion of unencumbered assets as of the same date.

At the end of the reported quarter, net of cash debt to equity ratio was 69.6%, down from 70.0% as of Jun 30, 2019.

Our Take

Prospect Capital’s loan origination activity continues to be on track. Itstrategically deploys capital, while maintaining a balanced and diversified approach across various industries and sectors.

Prospect Capital Corporation Price, Consensus and EPS Surprise

 

Prospect Capital Corporation Price, Consensus and EPS Surprise
Prospect Capital Corporation Price, Consensus and EPS Surprise

Prospect Capital Corporation price-consensus-eps-surprise-chart | Prospect Capital Corporation Quote

Currently, Prospect Capital 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

Hercules Capital Inc.’s HTGC second-quarter 2020 (ended June 30) net investment income of 32 cents per share lagged the Zacks Consensus Estimate by a penny. The bottom line declined 11.1% from the year-ago reported figure.

Ares Capital Corporation’s ARCC second-quarter 2020 core earnings of 39 cents per share beat the Zacks Consensus Estimate by a penny. However, the bottom line declined 20.4% year over year.

Victory Capital Holdings VCTR reported second-quarter 2020 adjusted earnings of 89 cents per share, outpacing the Zacks Consensus Estimate of 83 cents. Also, the reported figure compared favorably with 38 cents reported in the prior-year quarter.

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Ares Capital Corporation (ARCC) : Free Stock Analysis Report
 
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