Prospect Capital Beats Earnings, Revenue Estimates
Rise in NII
Prospect Capital (PSEC) generated NII (net investment income) per share of $0.20 in its fiscal 2Q18, which ended on December 31, 2017. However, during the same period, it generated NII amounting to $73.2 million.
The company’s NII per share in fiscal 2Q18 rose $0.02 compared to fiscal 1Q18 mainly due to a fall in administrative overhead costs. Some of the company’s loans are now in the income accrual category, which also contributed to the rise in its NII per share.
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Prospect’s fiscal 2Q18 represented the third consecutive quarter in which its repayments exceeded its originations.
Total investment income
Prospect capital generated total investment income of $162.4 million in fiscal 2Q18, reflecting a substantial fall from its fiscal 2Q17 results. Its total investment income was $183.4 million in fiscal 2Q17. Of the three components of the company’s total investment income, its total interest and its dividend income witnessed year-over-year falls in fiscal 2Q18.
Prospect Capital witnessed a fall in its distributions from $81.6 million in fiscal 1Q18 to $64.9 million in fiscal 2Q18, representing a substantial decline. This fall could create a negative picture in the eyes of the market participants. However, the company witnessed a substantial rise in its net asset value per share from $9.12 in fiscal 1Q18 to $9.28 in fiscal 2Q18.
On February 8, 2018, Prospect’s market cap stood at $2.2 billion. Its peers (XLF) FS Investment (FSIC), BlackRock Capital Investment (BKCC), and Apollo Investment (AINV) had market caps of $1.8 billion, $0.42 billion, and $1.2 billion, respectively.