ARC - Ares Capital Q2 core earnings beat helped by increased investing higher yields

Ares Capital ( NASDAQ: ARCC ) credits its 10% growth in Q2 core earnings vs. Q1 to increased investment activity, rising portfolio yields, and continued stable credit quality.

"With greater market volatility, the competitive environment has improved and we are seeing incrementally more attractive terms on new transaction opportunities," said CEO Kipp deVeer.

Q2 core EPS of $0.46 , exceeding the $0.44 consensus estimate, rose from $0.42 in Q1 and fell from $0.53 in Q2 2021.

Q2 net investment income of $257M, or $0.52 per share, increased from $198M, or $0.41 per share, in the prior quarter and from $171M, or $ 0.39per share, in the year-ago quarter.

Net realized losses of $3M, or $0.01 per share, compares with net realized gains of $10M, or $0.02 per share, in Q1 and gain of $59M, or $0.14 per share, in Q2 2021.

Portfolio investments at fair value were $21.2B at June 30, 2022 vs. $19.5B at March 31. Net assets per share of $ at the end of Q2 increased/fell from $19.03 at the end of Q1.

Debt/equity ratio increased to 1.27x from 1.13x in Q1.

Q2 gross commitments of $3.11B compares with $2.00B in Q1 and from $4.85B in the year-ago quarter; exits of commitments were $1.09B vs. $2.55B in the prior quarter and $2.93B in the year-ago quarter.

Since Q2 2022, Ares Capital ( ARCC ) has made new investment commitments of ~$245M, of which $142M were funded. During the same time, the company exited $379M of investment commitments, including $155M of loans sold to Ivy Hill Management or certain vehicles managed by IHAM.

Conference call at 12:00 PM ET.

Earlier, Ares Capital ( ARCC ) non-GAAP EPS of $0.46 beats by $0.02, TII of $479M beats by $12.79M

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