Prospect Capital: Earnings per Share and Revenues Miss Estimates

Not meeting expectations

Prospect Capital Corporation (PSEC) released its earnings report for fiscal 1Q18 on November 8. The company failed to meet the projections Wall Street analysts had set for earnings per share or EPS and revenues.

Prospect Capital: Earnings per Share and Revenues Miss Estimates

Prospect Capital reported EPS of  $0.18 in fiscal 1Q18 while Wall Street analysts projected $0.19. The company reported revenues amounting to $158.58 million in fiscal 1Q18, which were less than the Wall Street analyst estimates of $166.19 million.

Prospect Capital has a market capitalization of $2.1 billion. On the other hand, its peers (XLF) BlackRock Capital Investment (BKCC), KCAP Financial (KCAP), and Apollo Investment (AINV) have market capitalizations of $0.5 billion, $0.1 billion, and $1.35 billion, respectively.

Total interest income

In fiscal 1Q18, Prospect Capital saw a substantial year-over-year fall in total interest income. The company reported total interest income of $148.1 million in fiscal 1Q18, compared to $171.7 million in fiscal 1Q17.

The fall in the total interest income was mainly due to a fall in interest income from structured credit securities. In fiscal 1Q18, Prospect Capital recorded $29.4 million in interest income from structured credit securities, compared to $39.1 million in fiscal 1Q17.

However, Prospect Capital has also seen a substantial year-over-year fall in total dividend income from $2.4 million in fiscal 1Q17 to $0.5 million in fiscal 1Q18. The company saw a fall in net investment income or NII in fiscal 1Q18 compared to fiscal 1Q17.