Blue Owl Capital Set to Release Q4 2024 Earnings; Analysts Brace for Decline
Business development company Blue Owl Capital Corporation (OBDC) will report its fourth-quarter 2024 results on February 19, 2025, after the market closes. The Zacks Consensus Estimate for this quarter’s earnings stands at 46 cents per share, while revenues are expected to reach $395.59 million.
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Earnings Estimates Show a Downward Trend
The fourth-quarter earnings estimate has remained unchanged over the last two months. However, projections indicate a year-over-year decline of 9.8%. The Zacks Consensus Estimate for quarterly revenues also reflects a potential 3.8% decrease from the previous year.
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For the full year of 2024, the Zacks Consensus Estimate forecasts Blue Owl Capital’s revenues to hit $1.6 billion, reflecting a modest 1% rise from 2023. Meanwhile, the earnings per share (EPS) estimate for the current year stands at $1.89, indicating a decline of about 2.1% year-over-year.
Blue Owl Capital has exceeded consensus estimates in two of the last four quarters, falling short in the other two, with an average surprise of 1.1%.
Historical Performance: Price and EPS Surprise
Blue Owl Capital Corporation Price-EPS Surprise | Blue Owl Capital Corporation Quote
Earnings Predictions for Q4
Our analysis suggests a possible earnings beat for Blue Owl this quarter. The combination of a positive Earnings ESP and a Zacks Rank of #1 (Strong Buy), #2 (Buy), or #3 (Hold) boosts the chances of better-than-expected outcomes, and currently fits this profile.
OBDC has an Earnings ESP of +2.17% and holds a Zacks Rank of #3 at present. For insights into top-performing stocks, consider exploring our Earnings ESP Filter.
Access the complete list of today’s Zacks #1 Rank stocks here.
Factors Influencing Q4 Results
Our estimates indicate that net investment income for the fourth quarter may face a year-over-year drop of over 9%. The forecasts for non-controlled non-affiliated interest income also suggest a decline of nearly 9% compared to the previous year.
The company may encounter elevated net operating expenses of about $211 million, driven largely by increased interest expenses and management fees, potentially affecting margins in this quarter.
Conversely, an uptick in dividend income is anticipated, benefiting from recurring dividends earned from equity investments. Both the Zacks Consensus Estimate and our model estimate for controlled affiliated dividend income suggest growth of nearly 20% year over year.
Additionally, Blue Owl Capital’s investment portfolio is projected to see growth in the coming quarter, with a 22% increase in controlled affiliated interest income compared to the same period last year.
Estimates for payment-in-kind interest income from non-controlled, non-affiliated investments suggest an 11.5% year-over-year increase, which may help offset some losses. We also expect the supplemental dividend per share to be around 5 cents.
Comparative Performance of Other Financial Stocks
Several stocks in the broader Financial – Miscellaneous Services sector have already reported earnings this quarter, including Golub Capital BDC, Inc. (GBDC) and Ares Capital Corporation (ARCC).
Golub Capital posted first-quarter fiscal 2025 adjusted EPS of 39 cents, missing the Zacks Consensus Estimate by 9.3% and declining from 47 cents sequentially. Over the last four quarters, the company only met consensus EPS estimates once. Its total investment income of $220.7 million for the first quarter of fiscal 2025 also fell short of expectations by 2.5%, down from $224.4 million in the previous quarter.
Ares Capital recorded core earnings of 55 cents per share for the fourth quarter of 2024, missing the Zacks Consensus Estimate of 58 cents, largely due to increased expenses. However, improvement in total investment income and strong portfolio activities provided some support.
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Ares Capital Corporation (ARCC): Free Stock Analysis Report
Golub Capital BDC, Inc. (GBDC): Free Stock Analysis Report
Blue Owl Capital Corporation (OBDC): Free Stock Analysis Report
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The views expressed in this article are those of the author and do not necessarily reflect those of Nasdaq, Inc.
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