We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will High Interest Income Boost Blue Owl's (OBDC) Q2 Earnings?
Read MoreHide Full Article
Blue Owl Capital Corporation (OBDC - Free Report) is set to report its second-quarter 2023 results on Aug 9, after the closing bell.
What Do the Estimates Say?
The Zacks Consensus Estimate for second-quarter earnings per share of 46 cents suggests a 43.8% jump from the prior-year earnings of 32 cents. The consensus mark remained stable over the past week. The consensus estimate for second-quarter revenues of $384.3 million indicates a 40.6% increase from the year-ago reported figure.
Blue Owl Capital beat the consensus estimate for earnings in all the prior four quarters, with the average surprise being 4.2%. This is depicted in the graph below:
Blue Owl Capital Corporation Price and EPS Surprise
Before we get into what to expect in the to-be-reported quarter in detail, let’s see how the company performed in the last quarter.
Q1 Earnings Rewind
In the last reported quarter, the business development company reported adjusted earnings per share of 45 cents, beating the Zacks Consensus Estimate by 2.3% due to growth in the portfolio, increased interest rates and record net investment income. However, the positives were partially offset by higher costs.
For the second quarter, the net investment income is likely to have benefited on the back of solid credit performance, a high interest rate environment and improved dividend income. Our estimate suggests almost 35% year-over-year growth in the metric this time.
OBDC’s dividend income is expected to have witnessed an uptick due to recurring dividends earned from investments in its portfolio company Wingspire. Also, nonrecurring dividends stemming from efficient portfolio companies are likely to have aided the metric.
Our estimates for non-controlled and controlled dividend income in the second quarter suggest 68.3% and 13.5% year-over-year growth, respectively. The investment portfolio of Owl Rock Capital is likely to have expanded in the to-be-reported quarter due to solid demand for lucrative financing solutions amid economic volatilities. Our estimate for non-controlled interest income indicates a 38% increase from the prior-year quarter.
The factors stated above are expected to have positioned the company for year-over-year growth. However, repayments are expected to have remained soft in the quarter under review, with interest rates remaining high. Also, the company is likely to have witnessed elevated operating expenses.
The increase in costs is likely to have been due to higher interest expenses, management and performance-based incentive fees. This, in turn, is anticipated to have put a strain on its margins in the to-be-reported quarter, making an earnings beat uncertain. Our model predicts the operating expenses to have witnessed a 37% increase from the year-ago quarter's reported figure.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Blue Owl Capital this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of +4.73%. This is because the Most Accurate Estimate currently stands at earnings of 48 cents per share, higher than the Zacks Consensus Estimate of 46 cents.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: However, Blue Owl Capital currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
While an earnings beat looks uncertain for Blue Owl Capital, here are some companies from the broader Finance space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
Forge Global Holdings, Inc. (FRGE - Free Report) has an Earnings ESP of +11.11% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Forge Global’s earnings per share for the to-be-reported quarter suggests an improvement of 64.5% from the year-ago period. The estimate remained stable over the past week. The consensus mark for FRGE’s revenues is pegged at $16.4 million.
The Zacks Consensus Estimate for Credicorp’s bottom line for the to-be-reported quarter is pegged at $4.38 per share, which indicates a 16.8% increase from the year-ago period. The consensus estimate for BAP’s revenues is pegged at $1.3 billion, signaling a 19.5% year-over-year jump.
Postal Realty Trust, Inc. (PSTL - Free Report) has an Earnings ESP of +3.09% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Postal Realty’s bottom line for the to-be-reported quarter is pegged at 24 cents per share, which remained stable over the past week. The consensus mark for PSTL’s revenues is pegged at $15.3 million, signaling 20.4% year-over-year growth.
Image: Bigstock
Will High Interest Income Boost Blue Owl's (OBDC) Q2 Earnings?
Blue Owl Capital Corporation (OBDC - Free Report) is set to report its second-quarter 2023 results on Aug 9, after the closing bell.
What Do the Estimates Say?
The Zacks Consensus Estimate for second-quarter earnings per share of 46 cents suggests a 43.8% jump from the prior-year earnings of 32 cents. The consensus mark remained stable over the past week. The consensus estimate for second-quarter revenues of $384.3 million indicates a 40.6% increase from the year-ago reported figure.
Blue Owl Capital beat the consensus estimate for earnings in all the prior four quarters, with the average surprise being 4.2%. This is depicted in the graph below:
Blue Owl Capital Corporation Price and EPS Surprise
Blue Owl Capital Corporation price-eps-surprise | Blue Owl Capital Corporation Quote
Before we get into what to expect in the to-be-reported quarter in detail, let’s see how the company performed in the last quarter.
Q1 Earnings Rewind
In the last reported quarter, the business development company reported adjusted earnings per share of 45 cents, beating the Zacks Consensus Estimate by 2.3% due to growth in the portfolio, increased interest rates and record net investment income. However, the positives were partially offset by higher costs.
Now let’s see how things have shaped up before the second-quarter earnings announcement.
Q2 Factors to Note
For the second quarter, the net investment income is likely to have benefited on the back of solid credit performance, a high interest rate environment and improved dividend income. Our estimate suggests almost 35% year-over-year growth in the metric this time.
OBDC’s dividend income is expected to have witnessed an uptick due to recurring dividends earned from investments in its portfolio company Wingspire. Also, nonrecurring dividends stemming from efficient portfolio companies are likely to have aided the metric.
Our estimates for non-controlled and controlled dividend income in the second quarter suggest 68.3% and 13.5% year-over-year growth, respectively. The investment portfolio of Owl Rock Capital is likely to have expanded in the to-be-reported quarter due to solid demand for lucrative financing solutions amid economic volatilities. Our estimate for non-controlled interest income indicates a 38% increase from the prior-year quarter.
The factors stated above are expected to have positioned the company for year-over-year growth. However, repayments are expected to have remained soft in the quarter under review, with interest rates remaining high. Also, the company is likely to have witnessed elevated operating expenses.
The increase in costs is likely to have been due to higher interest expenses, management and performance-based incentive fees. This, in turn, is anticipated to have put a strain on its margins in the to-be-reported quarter, making an earnings beat uncertain. Our model predicts the operating expenses to have witnessed a 37% increase from the year-ago quarter's reported figure.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Blue Owl Capital this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of +4.73%. This is because the Most Accurate Estimate currently stands at earnings of 48 cents per share, higher than the Zacks Consensus Estimate of 46 cents.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: However, Blue Owl Capital currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
While an earnings beat looks uncertain for Blue Owl Capital, here are some companies from the broader Finance space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
Forge Global Holdings, Inc. (FRGE - Free Report) has an Earnings ESP of +11.11% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Forge Global’s earnings per share for the to-be-reported quarter suggests an improvement of 64.5% from the year-ago period. The estimate remained stable over the past week. The consensus mark for FRGE’s revenues is pegged at $16.4 million.
Credicorp Ltd. (BAP - Free Report) has an Earnings ESP of +1.75% and is a Zacks #2 Ranked player. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Credicorp’s bottom line for the to-be-reported quarter is pegged at $4.38 per share, which indicates a 16.8% increase from the year-ago period. The consensus estimate for BAP’s revenues is pegged at $1.3 billion, signaling a 19.5% year-over-year jump.
Postal Realty Trust, Inc. (PSTL - Free Report) has an Earnings ESP of +3.09% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Postal Realty’s bottom line for the to-be-reported quarter is pegged at 24 cents per share, which remained stable over the past week. The consensus mark for PSTL’s revenues is pegged at $15.3 million, signaling 20.4% year-over-year growth.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.