Ares Capital Q2: Earnings Beat, Rising Portfolio Yields & More

Ares Capital Corp ARCC reported Q2 2023 revenues of $634 million, beating the consensus of $622.05 million.

Interest income from investments rose to $476 million from $319 million a year ago.

Adjusted EPS of $0.58 surpassed the street estimate of $0.57. 

In Q2 2023, ARCC made new investment commitments of around $1.2 billion (approximately $1.0 billion were funded), with new investment commitments including 13 new portfolio companies and 33 existing portfolio companies. 

As of June 30, 2023, the company had $453 million in cash and equivalents and outstanding debt of $11.4 billion.

In April, the company's board of directors authorized an amendment to its share repurchase program, boosting the total authorized amount to $1.0 billion from $500 million. 

"We reported another strong quarter with year-over-year growth in our GAAP and Core earnings per share driven by rising portfolio yields, increased investment activity and continued stable credit quality. We believe that our scale, relationships and deep sourcing capabilities leave us well-positioned to capitalize on the growing demand for flexible capital from the middle market," said Kipp deVeer, Chief Executive Officer of Ares Capital.

Ares Capital has declared a third quarter 2023 dividend of $0.48 per share, payable on September 29, 2023, to stockholders of record as of September 15, 2023.

Price Action: ARCC shares are trading higher by 0.61% at $19.74 premarket on the last check Tuesday.