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Goldman Sachs BDC (GSBD) Q2 Earnings As Expected, Costs Down

Goldman Sachs BDC’s GSBD second-quarter 2020 net investment income of 45 cents per share came in line with the Zacks Consensus Estimate. The bottom-line figure fell 4.3% from the year-ago figure.

The company’s second-quarter results were unfavorably impacted by lower total investment income. Also, decrease in net asset value and decline in investment portfolio were headwinds. However, a drop in operating expenses acted as a positive.

Net investment income came in at $18.2 million compared with the prior-year quarter’s $19.1 million.

Total Investment Income Declines, Expenses Down

Total investment income was $30.6 million, down 20.3% from the year-ago quarter. Lower dividend and interest income resulted in this decline. The top-line figure also lagged the Zacks Consensus Estimate of $31.3 million.

Total expenses declined 24.9% year over year to $14.2 million. Lower interest and debt expenses mainly led to the decline.

The fair value of Goldman Sachs BDC’s total investment portfolio was $1.42 billion as of Jun 30, 2020.

Balance Sheet Position

As of Jun 30, 2020, Goldman Sachs BDC’s net asset value (NAV) was $15.14 per share compared with $16.75 as of Dec 31, 2019.

As of Jun 30, 2020, the company had $918.5 million of total principal amount of debt outstanding, comprising $403.5 million of outstanding borrowings under its senior secured revolving credit facility, $155 million of unsecured convertible notes and $360 million of unsecured notes.

Also, Goldman Sachs BDC had $391.7 million of availability under its senior secured revolving credit facility, and $105.8 million in cash and cash equivalents.

Our Take

Steady improvement in total investment income and strong origination volume are anticipated to support this Zacks Rank #3 (Hold) company’s bottom-line growth. Moreover, controlled expenses are a tailwind. Nevertheless, decline in NAV is a major drag.

Goldman Sachs BDC, Inc. Price, Consensus and EPS Surprise

Goldman Sachs BDC, Inc. Price, Consensus and EPS Surprise
Goldman Sachs BDC, Inc. Price, Consensus and EPS Surprise

Goldman Sachs BDC, Inc. price-consensus-eps-surprise-chart | Goldman Sachs BDC, Inc. Quote

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Finance Stocks

LendingTree TREE recorded second-quarter 2020 adjusted net income per share of 46 cents, missing the Zacks Consensus Estimate of 61 cents. Further, the figure came in lower than the prior-year quarter’s $1.18 per share.

First Horizon National Corporation FHN delivered second-quarter 2020 adjusted earnings per share of 20 cents, missing the Zacks Consensus Estimate of 21 cents. The bottom-line figure was also 52.4% lower than the year-ago figure.

BOK Financial BOKF reported a negative earnings surprise of 21.4% for the June-end quarter. Earnings per share of 92 cents lagged the Zacks Consensus Estimate of $1.17. In addition, the bottom line compared unfavorably with the prior-year quarter’s $1.93.

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