2024-05-02 14:06:11 ET
Summary
- Oaktree Specialty Lending Corporation released its Q1 earnings on Tuesday. The release missed analyst estimates and showed declining investment income.
- The company slashed its management fee by 33% on the news.
- One bright spot in the earnings release was a decline in the number of non-accrual loans. There were fewer of them than there were in the December quarter.
- In this article, I explain why I reduced my Oaktree position by 30% after its earnings release came out.
On Tuesday, Oaktree Specialty Lending Corporation ( OCSL ) released its earnings for the first quarter (its fiscal second quarter). The results were $94 million in investment income, down 1.8% year over year, and $0.56 in adjusted earnings per share (“EPS”), down 1.75%. The book value also declined, dipping below $19. Although OCSL's release missed expectations , the stock rallied the day after it came out, possibly because of the announced management fee reduction. The reduction in fees took 50 basis points off the management fee that investors incur. It was a very welcome development. Another positive note in the release was the number of accruals, which decreased by two on a quarter over quarter (q/q) basis. The value of the non-accrual loans decreased as well....
Read the full article on Seeking Alpha
For further details see:
Oaktree Specialty Lending: Love The 11% Yield, Didn't Like The Earnings