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What's in the Cards for Ares Capital (ARCC) in Q2 Earnings?

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·3 min read
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Ares Capital Corporation ARCC is scheduled to announce second-quarter 2021 results on Jul 28, before market open. Its revenues and earnings are anticipated to have improved in the quarter on a year-over-year basis.

In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results reflected an improvement in total investment income and solid portfolio activity. However, higher expenses hurt results to some extent.

Ares Capital has an impressive earnings surprise history. The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 10.7%.

Ares Capital Corporation Price and EPS Surprise

Ares Capital Corporation Price and EPS Surprise
Ares Capital Corporation Price and EPS Surprise

Ares Capital Corporation price-eps-surprise | Ares Capital Corporation Quote

Earnings & Sales Projections for Q2

The Zacks Consensus Estimate for earnings is pegged at 43 cents, which has been unchanged over the past seven days. The figure indicates a rise of 10.3% from the year-ago quarter’s reported number.

The consensus estimate for sales of $386 million suggests 10.3% growth on a year-over-year basis.

Other Key Estimates for Q2

The Zacks Consensus Estimate for interest income from investments (constituting a significant portion of the company’s total investment income) is pegged at $292 million, indicating a 1% rise from the prior quarter’s reported figure.

However, the consensus estimate for capital structuring service fees is pegged at $34.25 million, suggesting a 9.9% sequential decline. The Zacks Consensus Estimate for dividend income of $47.88 million indicates a decline of 7.9% on a sequential basis.

The consensus estimate for other income is pegged at $11.76 million, suggesting a rise of 6.9% from the prior quarter’s reported figure.

Ares Capital has been witnessing higher expenses over the past several quarters. As it continues to invest in venture growth stage companies, operating expenses are expected to have been elevated in the second quarter as well.

Earnings Whispers

According to our quantitative model, the chances of Ares Capital beating the Zacks Consensus Estimate this time are low. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Ares Capital has an Earnings ESP of +0.33%.

Zacks Rank: The company currently carries a Zacks Rank #5 (Strong Sell).

Finance Stocks That Warrant a Look

Here are a few finance stocks that you may want to consider as these have the right combination of elements to post an earnings beat in their upcoming releases, per our model.

The Earnings ESP for Prosperity Bancshares PB is +1.52% and it carries a Zacks Rank #2 (Buy) at present. The company is slated to report quarterly numbers on Jul 28.

Evercore Inc. EVR is also scheduled to release earnings on Jul 28. The company currently carries a Zacks Rank #2 and has an Earnings ESP of +4.84%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

T. Rowe Price Group TROW is scheduled to release earnings on Jul 29. The company, which carries a Zacks Rank #2 at present, has an Earnings ESP of +1.34%.


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T. Rowe Price Group, Inc. (TROW) : Free Stock Analysis Report

Ares Capital Corporation (ARCC) : Free Stock Analysis Report

Evercore Inc (EVR) : Free Stock Analysis Report

Prosperity Bancshares, Inc. (PB) : Free Stock Analysis Report

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