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What's in Store for Capitala Finance (CPTA) in Q2 Earnings?

Zacks Equity Research

Capitala Finance Corp. CPTA is scheduled to announce second-quarter 2019 results on Aug 5, after the market closes. Its revenues and earnings are projected to grow year over year.

In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Its results benefited from rise in total investment income, partly offset by higher expenses.

The company does not have an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in only one of the trailing four quarters.

Capitala Finance Corp. Price and EPS Surprise
 

Capitala Finance Corp. Price and EPS Surprise

Capitala Finance Corp. price-eps-surprise | Capitala Finance Corp. Quote

Moreover, activities of the company in the second quarter failed to win analysts’ confidence. As a result, the Zacks Consensus Estimate for earnings of 25 cents has remained unchanged over the past 30 days. Nonetheless, it implies 13.6% growth from the year-ago quarter’s reported figure.

Further, the consensus estimate for sales of $12.48 million suggests growth of 5.1% on a year-over-year basis.

Before we take a look at what our quantitative model predicts for the to-be-reported quarter, let’s check the factors that are likely to impact results.

Factors to Impact Q2 Results

Given the contraction in LIBOR rates in the second quarter, Capitala Finance’s floating-rate debt investments, which are tied to LIBOR will likely hurt investment income. Nevertheless, the expectation of higher prepayment activity during the quarter is likely to have supported total investment income to some extent.

Earnings Whispers

According to our quantitative model, it cannot be conclusively predicted whether Capitala Finance will be able to beat the Zacks Consensus Estimate this time. 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 — for increasing the odds of an earnings beat.

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

Earnings ESP: Capitala Finance has an Earnings ESP of 0.00%.

Zacks Rank: The company currently carries a Zacks Rank #3. While this increases the predictive power of ESP, we also need a positive ESP to be confident of an earnings beat.

Stocks That Warrant a Look

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

Apollo Investment Corporation AINV is scheduled to release results on Aug 6. It presently has an Earnings ESP of +1.82% and a Zacks Rank #3.

Banco Macro S.A. BMA is expected to release results on Aug 28. It has an Earnings ESP of +11.83% and a Zacks Rank #3.

Eaton Vance Corporation EV is expected to release quarterly results on Sep 4. It has an Earnings ESP of +3.21% and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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