2023-05-02 09:41:09 ET
Ares Commercial Real Estate ( NYSE: ACRE ) stock dropped 5.6% in Tuesday morning trading even after delivering Q1 earnings and revenue below Wall Street expectations against a backdrop of a troubled commercial property market.
Q1 distributable EPS of $0.27 (including previously announced realized loss of $0.10), trailing the average analyst estimate of $0.30, dropped from $0.44 in the prior quarter.
“With non-spread based mark to market financing, net debt-to-equity below 2.0x and more than $150 million in cash representing more than 20% of stockholders’ equity as of March 31, 2023, we believe our strong balance sheet positions us to maximize credit outcomes on our higher risk rated assets and make new opportunistic investments with attractive risk adjusted returns,” said CFO Tae-Sik Yoon.
Interest income came in at $49.5M for the three months ended March 31, 2023, up from $52.6M for the quarter ended Dec. 31, 2022, and from $33.4M for the quarter ended March 31, 2022.
Expenses totaled $6.20M, down from $7.83M in Q4 2022 and from $10.5M in Q1 2022.
Net interest margin was $26.5M vs. $21.4M in the year-ago quarter.
Loans held for investment stood at $2.17B as of March 31, 2023, compared with $2.26B as of Dec. 31, 2022.
Conference call at 10:00 a.m. ET.
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Ares Commercial Real Estate Q1 earnings fall in wake of industry challenges