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Ares Capital (NASDAQ:ARCC) delivered Q3 earnings on Tuesday that surpassed Wall Street expectations as higher interest rates benefited the business development company during the quarter.
Q3 core EPS of $0.59, slightly exceeding the $0.58 average analyst estimate, ticked up from $0.58 in Q2 and from $0.50 in the year-earlier period.
“During the third quarter, we raised more than $800 million of new capital, including the issuance of unsecured notes, further strengthening our liquidity profile,” said CFO Penni Roll. “Our balance sheet remains a source of strength with ample liquidity and low leverage at 1.03x net debt to equity, which we believe positions us well to capitalize on our distinct investing advantages in today’s market.”
ARCC gained 1.9% in premarket trading.
Net investment income of $289M, fell from $314M in the prior quarter and advanced from $288M a year before.
Total expenses were $363M compared with $314M in Q2 and $235M in Q3 2022.
Portfolio investments at fair value were $21.9B at Sept. 30, 2023, vs. $21.5B at June 30, 2023, and $21.8B at Dec. 31, 2022. Net assets per share of $18.99 at Sept. 30, 2023 rose from $18.58 at June 30, 2023, and from $18.40 at Dec. 31, 2022.
Looking at portfolio and investment activity, Ares (ARCC) made gross commitments of $1.60B, up from $1.22B in Q2 and down from $2.24B a year ago. Exits of commitments stood at $1.28B compared with $1.14B in Q2 and $1.98B in Q3 of last year.
As of Oct. 18, 2023, Ares (ARCC) had an investment backlog and pipeline of about $820M and $0, respectively. From Oct.1, 2023 through Oct. 18, 2023, the company made new investment commitments of ~$410M, of which $297M were funded.
Conference call at 12:00 p.m. ET.
