Yahoo Finance Hercules Capital (HTGC) Q1 Earnings Beat Despite Higher Costs
Hercules Capital Inc.’s HTGC first-quarter 2024 net investment income of 50 cents per share outpaced the Zacks Consensus Estimate of 48 cents. The bottom line reflects a rise of 4.2% 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 $79.2 million, up 20.9% year over year.
Total Investment Income Improves, Expenses Rise
Total investment income in the quarter was $121.6 million, jumping 15.7% from the year-ago quarter. The top line also beat the Zacks Consensus Estimate of $119.6 million.
Total gross operating expenses increased 7.1% year over year to $45.3 million. The rise was due to an increase in almost all cost components, except for tax expenses.
Portfolio Value & New Commitments Solid
The fair value of Hercules Capital’s total investment portfolio was $3.57 billion as of Mar 31, 2024.
In the first quarter, the company delivered $956 million in gross new debt and equity commitments, and $605.2 million in gross new funding. It realized early loan repayments of $161.1 million.
Balance Sheet Position Strong
As of Mar 31, 2024, Hercules Capital’s net asset value was $11.63 per share compared with $11.43 as of Dec 31, 2023.
As of Mar 31, 2024, the company had $498.1 million in liquidity, including $50.2 million of unrestricted cash and cash equivalents, and $447.9 million in credit facilities.
At the end of the quarter, the weighted average cost of debt, comprising interest and fees, was 4.9%, up from 4.7% at the end of the prior-year quarter.
Our View
Hercules Capital’s loan origination activity continues to be on track, which 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 #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Finance Companies
Ally Financial’s ALLY first-quarter 2024 adjusted earnings of 45 cents per share surpassed the Zacks Consensus Estimate of 33 cents. However, the bottom line reflects a decline of 45.1% from the year-ago quarter.
ALLY’s results were primarily aided by an improvement in other revenues. However, a decline in net financing revenues, along with higher expenses and provisions, were the undermining factors.
Navient Corporation NAVI reported first-quarter 2024 adjusted earnings per share (excluding regulatory-related and restructuring expenses) of 63 cents, surpassing the Zacks Consensus Estimate of 58 cents. The company reported 86 cents in the prior-year quarter.
NAVI’s results were driven by a rise in total other income and a fall in expenses. However, a decline in net interest income affected the results.
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