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OBDC's Q3 Earnings Miss on Higher Expenses, Investment Income Up
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Blue Owl Capital Corporation (OBDC - Free Report) reported third-quarter 2024 earnings per share (EPS) of 47 cents, which missed the Zacks Consensus Estimate by a penny. The bottom line declined by 2 cents from a year ago.
The total investment income of Blue Owl Capital amounted to $406.03 million, which increased 1.8% year over year. Also, the top line beat the Zacks Consensus Estimate by 1.6%.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Blue Owl Capital’s weak third-quarter earnings were due to higher expenses and lower interest income from non-controlled, non-affiliated investments. The negatives were partially offset by higher investment income from controlled, affiliated investments.
Blue Owl Capital Corporation Price, Consensus and EPS Surprise
Net investment income decreased 2.7% year over year to $184.9 million. Also, the metric missed our estimate of $188.9 million. Total new investment commitments (net of sell-downs) were $1.2 billion across 23 new portfolio companies and 14 existing ones.
Blue Owl Capital ended the third quarter with investments in 219 portfolio companies, backed with an aggregate fair value of $13.4 billion. Based on the fair value, the average investment size in each portfolio company was $61.4 million as of Sept. 30, 2024.
Total expenses increased 5.5% from the year-ago period to $217.6 million in the third quarter. The metric was higher than our estimate of $208.9 million, primarily due to higher interest expenses, management fees and other G&A expenses.
The company recorded a net income of $135.4 million in the third quarter compared with $206.9 million in the year-ago period.
Financial Update (as of Sept. 30, 2024)
Blue Owl Capital exited the third quarter with a cash balance of $481.3 million, which declined from $658.7 million as of Dec. 31, 2023. Total assets of $14.09 billion rose from $13.51 billion at 2023-end.
Debt was $7.74 billion, up from $7.08 billion at 2023-end. Blue Owl Capital had $1.6 billion of undrawn capacity under its credit facilities. At the third-quarter end, net debt to equity was 1.23X.
Net cash used in operating activities in the first nine months of 2024 was $285.74 million against the prior-year operating cash flow figure of $721.75 million.
Dividend & Repurchase Update
The board of directors at Blue Owl Capital declared a fourth-quarter 2024 dividend of 37 cents per share, to be paid on or before Jan. 15, 2025, to shareholders of record as of Dec. 31, 2024. It also provided a third-quarter 2024 supplemental dividend of 5 cents per share.
Blue Owl Capital’s board earlier approved a new share repurchase plan for 2024, under which the company may purchase shares up to $150 million. It did not make share repurchases under this program in the third quarter.
The Zacks Consensus Estimate for Jackson Financial’s current-year earnings is pegged at $18.79 per share, which indicates 46.3% year-over-year growth. It witnessed one upward estimate revision in the past 30 days against no downward movement. The consensus mark for JXN’s current year revenues suggests a 117.5% surge from a year ago.
The Zacks Consensus Estimate for WisdomTree’s 2024 earnings indicates 75.7% year-over-year growth. During the past month, WT has witnessed three upward estimate revisions against none in the opposite direction. It beat earnings estimates thrice in the past four quarters and met once, with an average surprise of 7.3%.
The Zacks Consensus Estimate for Globe Life’s current-year earnings suggests a 15.1% year-over-year increase. During the past month, GLhas witnessed five upward estimate revisions against none in the opposite direction. The consensus mark for current-year revenues is pegged at $5.8 billion, a 5.6% increase from a year ago.
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OBDC's Q3 Earnings Miss on Higher Expenses, Investment Income Up
Blue Owl Capital Corporation (OBDC - Free Report) reported third-quarter 2024 earnings per share (EPS) of 47 cents, which missed the Zacks Consensus Estimate by a penny. The bottom line declined by 2 cents from a year ago.
The total investment income of Blue Owl Capital amounted to $406.03 million, which increased 1.8% year over year. Also, the top line beat the Zacks Consensus Estimate by 1.6%.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Blue Owl Capital’s weak third-quarter earnings were due to higher expenses and lower interest income from non-controlled, non-affiliated investments. The negatives were partially offset by higher investment income from controlled, affiliated investments.
Blue Owl Capital Corporation Price, Consensus and EPS Surprise
Blue Owl Capital Corporation price-consensus-eps-surprise-chart | Blue Owl Capital Corporation Quote
OBDC’s Q3 Update
Net investment income decreased 2.7% year over year to $184.9 million. Also, the metric missed our estimate of $188.9 million. Total new investment commitments (net of sell-downs) were $1.2 billion across 23 new portfolio companies and 14 existing ones.
Blue Owl Capital ended the third quarter with investments in 219 portfolio companies, backed with an aggregate fair value of $13.4 billion. Based on the fair value, the average investment size in each portfolio company was $61.4 million as of Sept. 30, 2024.
Total expenses increased 5.5% from the year-ago period to $217.6 million in the third quarter. The metric was higher than our estimate of $208.9 million, primarily due to higher interest expenses, management fees and other G&A expenses.
The company recorded a net income of $135.4 million in the third quarter compared with $206.9 million in the year-ago period.
Financial Update (as of Sept. 30, 2024)
Blue Owl Capital exited the third quarter with a cash balance of $481.3 million, which declined from $658.7 million as of Dec. 31, 2023. Total assets of $14.09 billion rose from $13.51 billion at 2023-end.
Debt was $7.74 billion, up from $7.08 billion at 2023-end. Blue Owl Capital had $1.6 billion of undrawn capacity under its credit facilities. At the third-quarter end, net debt to equity was 1.23X.
Net cash used in operating activities in the first nine months of 2024 was $285.74 million against the prior-year operating cash flow figure of $721.75 million.
Dividend & Repurchase Update
The board of directors at Blue Owl Capital declared a fourth-quarter 2024 dividend of 37 cents per share, to be paid on or before Jan. 15, 2025, to shareholders of record as of Dec. 31, 2024. It also provided a third-quarter 2024 supplemental dividend of 5 cents per share.
Blue Owl Capital’s board earlier approved a new share repurchase plan for 2024, under which the company may purchase shares up to $150 million. It did not make share repurchases under this program in the third quarter.
Zacks Rank & Key Picks
OBDC currently has a Zacks Rank #4 (Sell).
Investors interested in the broader Finance space may look at some better-ranked players like Jackson Financial Inc. (JXN - Free Report) , WisdomTree, Inc. (WT - Free Report) and Globe Life Inc. (GL - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Jackson Financial’s current-year earnings is pegged at $18.79 per share, which indicates 46.3% year-over-year growth. It witnessed one upward estimate revision in the past 30 days against no downward movement. The consensus mark for JXN’s current year revenues suggests a 117.5% surge from a year ago.
The Zacks Consensus Estimate for WisdomTree’s 2024 earnings indicates 75.7% year-over-year growth. During the past month, WT has witnessed three upward estimate revisions against none in the opposite direction. It beat earnings estimates thrice in the past four quarters and met once, with an average surprise of 7.3%.
The Zacks Consensus Estimate for Globe Life’s current-year earnings suggests a 15.1% year-over-year increase. During the past month, GLhas witnessed five upward estimate revisions against none in the opposite direction. The consensus mark for current-year revenues is pegged at $5.8 billion, a 5.6% increase from a year ago.