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Hercules Capital (HTGC) Q2 Earnings Meet Estimates, Costs Up
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Hercules Capital Inc.’s (HTGC - Free Report) second-quarter 2024 net investment income of 51 cents per share matched the Zacks Consensus Estimate. The bottom line, however, declined 3.8% from the year-ago quarter.
Results were primarily aided by an increase in the total investment income. Also, the balance sheet position remained strong and new commitments were robust. However, a rise in operating expenses was a headwind.
Net investment income was $82.4 million, up 8.8% year over year.
Total Investment Income Improves, Expenses Rise
Total investment income in the second quarter was $125 million, rising 7.5% from the year-ago quarter. The top line marginally beat the Zacks Consensus Estimate of $124.99 million.
Total gross operating expenses increased 5.9% to $45.5 million. The rise was due to an increase in interest expenses and total employee compensation.
Portfolio Value & New Commitments Solid
The fair value of Hercules Capital’s total investment portfolio was $3.57 billion as of Jun 30, 2024.
In the second quarter, the company delivered $686.5 million in gross new debt and equity commitments and $461.5 million in gross new funding. It realized early loan repayments of $306.1 million.
Balance Sheet Position Strong
As of Jun 30, 2024, Hercules Capital’s net asset value was $11.43 per share, on par with the Dec 31, 2023 level.
As of Jun 30, 2024, the company had $482 million in liquidity, including $27.7 million of unrestricted cash and cash equivalents, and $454.3 million in credit facilities.
At the end of the quarter, the weighted average cost of debt, comprising interest and fees, was 5%, up from 4.8% at the end of the prior-year quarter.
Our View
Hercules Capital’s loan origination activity continues to be on track. This is likely to support top-line growth in the quarters ahead. However, as the company undertakes efforts to improve originations, expenses are expected to be elevated.
Hercules Capital, Inc. Price, Consensus and EPS Surprise
Ares Capital’s (ARCC - Free Report) second-quarter 2024 core earnings of 61 cents per share beat the Zacks Consensus Estimate of 58 cents. The bottom line reflects a rise of 5.2% from the prior-year quarter.
Results were primarily driven by an improvement in the total investment income. Also, the company’s portfolio activity was robust in the quarter. However, an increase in expenses acted as an undermining factor for ARCC.
LendingTree, Inc.’s (TREE - Free Report) second-quarter 2024 adjusted net income per share of 54 cents missed the Zacks Consensus Estimate of 73 cents. The reported figure compares unfavorably with $1.14 reported in the prior-year quarter.
TREE’s results were affected by a lower liquidity level and a decline in EBITDA. However, a rise in revenues, along with lower costs, acted as tailwinds.
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Hercules Capital (HTGC) Q2 Earnings Meet Estimates, Costs Up
Hercules Capital Inc.’s (HTGC - Free Report) second-quarter 2024 net investment income of 51 cents per share matched the Zacks Consensus Estimate. The bottom line, however, declined 3.8% from the year-ago quarter.
Results were primarily aided by an increase in the total investment income. Also, the balance sheet position remained strong and new commitments were robust. However, a rise in operating expenses was a headwind.
Net investment income was $82.4 million, up 8.8% year over year.
Total Investment Income Improves, Expenses Rise
Total investment income in the second quarter was $125 million, rising 7.5% from the year-ago quarter. The top line marginally beat the Zacks Consensus Estimate of $124.99 million.
Total gross operating expenses increased 5.9% to $45.5 million. The rise was due to an increase in interest expenses and total employee compensation.
Portfolio Value & New Commitments Solid
The fair value of Hercules Capital’s total investment portfolio was $3.57 billion as of Jun 30, 2024.
In the second quarter, the company delivered $686.5 million in gross new debt and equity commitments and $461.5 million in gross new funding. It realized early loan repayments of $306.1 million.
Balance Sheet Position Strong
As of Jun 30, 2024, Hercules Capital’s net asset value was $11.43 per share, on par with the Dec 31, 2023 level.
As of Jun 30, 2024, the company had $482 million in liquidity, including $27.7 million of unrestricted cash and cash equivalents, and $454.3 million in credit facilities.
At the end of the quarter, the weighted average cost of debt, comprising interest and fees, was 5%, up from 4.8% at the end of the prior-year quarter.
Our View
Hercules Capital’s loan origination activity continues to be on track. This is likely to support top-line growth in the quarters ahead. However, as the company undertakes efforts to improve originations, expenses are expected to be elevated.
Hercules Capital, Inc. Price, Consensus and EPS Surprise
Hercules Capital, Inc. price-consensus-eps-surprise-chart | Hercules Capital, Inc. Quote
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 of Other Finance Companies
Ares Capital’s (ARCC - Free Report) second-quarter 2024 core earnings of 61 cents per share beat the Zacks Consensus Estimate of 58 cents. The bottom line reflects a rise of 5.2% from the prior-year quarter.
Results were primarily driven by an improvement in the total investment income. Also, the company’s portfolio activity was robust in the quarter. However, an increase in expenses acted as an undermining factor for ARCC.
LendingTree, Inc.’s (TREE - Free Report) second-quarter 2024 adjusted net income per share of 54 cents missed the Zacks Consensus Estimate of 73 cents. The reported figure compares unfavorably with $1.14 reported in the prior-year quarter.
TREE’s results were affected by a lower liquidity level and a decline in EBITDA. However, a rise in revenues, along with lower costs, acted as tailwinds.