Hercules Capital (HTGC) Q3 Earnings In Line, Revenues Up Y/Y
Zacks Investment Research | Nov 01, 2018 10:43PM ET
Hercules Capital, Inc.’s (NYSE:HTGC) third-quarter 2018 net investment income of 31 cents per share was in line with the Zacks Consensus Estimate. The figure was 6.9% above the year-ago quarter figure.
Results reflected higher revenues, growth in investment portfolio and a rise in net asset value. However, increase in operating expenses was an undermining factor.
Distributional Net Operating Income came in at $32.6 million or 34 cents per share, up from $25.8 million or 31 cents per share in the prior-year quarter.
Total Investment Income Improves, Expenses Rise
Total investment income was $52.6 million, up 14.7% from the year-ago period. The increase was mainly driven by higher average debt investment balance and an overall rise in the core yield. However, the figure missed the Zacks Consensus Estimate of $54.3 million.
Total operating expenses rose 6.4% year over year to $23.3 million. The increase was largelydue to higher interest expenses, loan fees and total employee compensation costs.
Total Portfolio Value & New Commitments
The fair value of Hercules Capital’s total investment portfolio was $1.76 billion as of Sep 30, 2018.
In the reported quarter, the company provided $235.1 million in new debt and equity-financing commitments to eight new companies and 11 existing portfolio companies.
Strong Balance Sheet
As of Sep 30, 2018, Hercules Capital’s net asset value was $10.38 per share compared with $10.22 as of Jun 30, 2018. The rise was mainly driven by a change in unrealized depreciation and realized losses and unrealized gains, and accretive proceeds from ATM activity during the quarter.
The company had $137.3 million in liquidity, including $43.2 million in unrestricted cash and cash equivalents and $94.1 million in credit facilities as of Sep 30, 2018.
At the end of the third quarter, the weighted average cost of debt comprising interest and fees was 5.6%, stable year over year.
Capital Deployment Actions
Concurrent with earnings release, Hercules Capital announced third-quarter regular and supplemental cash distribution of 31 cents and 2 cents per share, respectively. Both of these will be paid on Nov 19, 2018, to shareholders on record as of Nov 12, 2018.
Our Take
Hercules Capital’s loan origination activity continues to be on track and it strategically deploys its capital while maintaining a balanced and diversified approach across various industries and sectors. However, elevated expense levels, owing to its efforts to enhance originations, are expected to hurt the bottom line to some extent.
Hercules Capital, Inc. Price, Consensus and EPS Surprise
Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.