Ares Capital Real Estate ( NYSE: ACRE ) on Wednesday turned in Q4 earnings that surpassed the average analyst estimate and improved from the prior quarter driven by its "nearly 100% floating rate asset base and the partial hedging of our liabilities" against a backdrop of rising interest rates, said CEO Bryan Donohoe.
While the commercial real estate market continued to face headwinds during the quarter, "our moderate debt to equity, strong liquidity position and focus on non-mark to market financing puts us in position to maximize credit outcomes and invest opportunistically in an evolving market," said CFO Tae-Sik Yoon.
Q4 distributable EPS of $0.44, topping the $0.37 consensus, increased from $0.39 in Q3. Revenue of $30.41M, exceeding the $27.36M consensus, climbed from $27.3M in the prior quarter.
ACRE gained 2.4% in premarket trading.
Interest income came in at $52.55M for the three months ended Dec. 31, 2022, up from $45.6M for the three months ended Sept. 30, 2022.
Total expenses were $7.83M compared with $7.14M in Q3.
Loans held for investment of $2.26B as of Dec. 31, 2022, drifted down from $2.41B as of Dec. 31, 2021.
Conference call at 12:00 p.m. ET.
Earlier, Ares Commercial Real Estate Non-GAAP EPS of $0.44 beats by $0.07, revenue of $30.4M beats by $3.04M .
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Ares Commercial Real Estate delivers Q4 earnings beat on rising rates