Hercules Capital Inc.’s (NYSE:HTGC) second-quarter 2019 net investment income of 36 cents per share outpaced the Zacks Consensus Estimate of 33 cents. The bottom line also was 38.5% above the year-ago figure.
Results benefited from higher total investment income, increase in net asset value and growth in investment portfolio. However, rise in operating expenses acted as a headwind.
Distributional net operating income came in at $39.1 million or 40 cents per share, up from $25.6 million or 29 cents per share in the prior-year quarter.
Total Investment Income Improves, Expenses Rise
Total investment income was $69.3 million, up 39.8% from the year-ago quarter. The upside was mainly driven by a higher average debt investment balance and rise in income from acceleration from early loan repayments. The top line beat the Zacks Consensus Estimate of $62.5 million.
Total operating expenses jumped 26.9% year over year to $34 million. The increase was mainly due to higher interest expenses, general and administrative costs, and total employee-compensation costs.
Total Portfolio Value & New Commitments
The fair value of Hercules Capital’s total investment portfolio was $2.3 billion as of Jun 30, 2019.
In the reported quarter, the company provided $534.8 million in new debt and equity commitments.
Balance Sheet Position
As of Jun 30, 2019, Hercules Capital’s net asset value was $10.59 per share compared with $10.26 on Mar 31, 2019.
The company had $194.9 million in liquidity, including $13.3 million in unrestricted cash and cash equivalents and $181.6 million in credit facilities, as of Jun 30, 2019.
At the end of the second quarter, the weighted average cost of debt comprising interest and fees was 5.2%, down from 6.4% from the prior-year quarter end.
Our Take
Hercules Capital’s loan origination activity continues to be on track. However, elevated expense levels might hurt the bottom line to some extent.
Currently, Hercules Capital carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance & Earnings Release Dates of Other Finance Stocks
Ares Capital Corporation’s (NASDAQ:ARCC) second-quarter 2019 core earnings of 49 cents per share surpassed the Zacks Consensus Estimate of 44 cents. Also, the bottom line increased 25.6% from the year-ago quarter.
Capitala Finance Corp. (NASDAQ:CPTA) and FS KKR Capital Corp. (NYSE:FSK) are scheduled to announce results on Aug 5 and Aug 7, respectively.
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Hercules Capital, Inc. (HTGC): Free Stock Analysis Report
Ares Capital Corporation (ARCC): Free Stock Analysis Report
Capitala Finance Corp. (CPTA): Free Stock Analysis Report
FS Investment Corporation (FSK): Free Stock Analysis Report
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