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Prospect Capital reports Q2 fiscal year 2024 earnings By Investing.com

Allbirds Shares Plummet 14% on Weak Guidance, While Q2 Results Beat Estimates

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Prospect Capital Corporation (NASDAQ:) has disclosed its financial results for the second quarter of the fiscal year 2024. The company reported net investment income of $96.9 million, or $0.24 per common share, and a net asset value (NAV) of $3.68 billion, equating to $8.92 per common share. This NAV represents a decrease of $0.33 per share from the previous quarter. Prospect Capital also announced monthly cash distributions to shareholders at $0.06 per share for the upcoming months of February, March, and April.

Key Takeaways

  • Prospect Capital’s net investment income stood at $96.9 million for the December quarter.
  • The net asset value per common share decreased by $0.33 from the previous quarter to $8.92.
  • The company has maintained a net debt equity ratio of 46.2% and will not increase its leverage beyond the target range of 0.7 to 0.85 debt-to-equity.
  • Monthly cash distributions of $0.06 per share have been announced for the next three months.
  • Prospect Capital has a diversified investment portfolio, with a significant portion in first-lien and second-lien debt.
  • The company’s investment strategy includes private equity, real estate, and structured credit, with a long-term liabilities ladder.
  • Over $1.7 billion has been raised through perpetual preferred stock, and the firm holds investment-grade ratings from multiple agencies.

Company Outlook

  • Prospect Capital has invested over $20.6 billion across 420 investments since its inception.
  • The company has a diversified investment strategy and a portfolio that includes a mix of debt and equity investments.
  • Prospect Capital’s subordinated structured credit portfolio has generated significant cumulative cash distributions.

Bearish Highlights

  • The net asset value per common share has seen a decrease in the recent quarter.
  • Non-accruals, although minimal, are present in the portfolio.

Bullish Highlights

  • Prospect Capital holds $4.7 billion of unencumbered assets, representing about 60% of its total portfolio.
  • The company enjoys strong lender support with $1.95 billion of commitments from 53 banks.
  • Prospect Capital’s investment-grade ratings and diversified investment approach provide financial stability.

Misses

  • There was an unexpected spike in the allocation to Prospect administration during the quarter.

Q&A Highlights

  • Management discussed strategies for portfolio management, including refinancing options and potential sales of positions.
  • The company expects the spiked allocation to Prospect administration to return to…

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