Hercules Technology Growth Capital, Inc.
) reported distributable net operating income (DNOI) of 34 cents
per share in second-quarter 2014, outpacing the Zacks Consensus
Estimate of 30 cents. The figure also compared favorably with the
year-ago DNOI of 32 cents.
Results benefited from a decline in expenses and rise in total
interest income, partially offset by a decrease in total fees.
Moreover, Hercules Technology continued with its efficient capital
deployment activities on the back of a solid liquidity position.
DNOI grew 9.5% year over year to $21.0 million.
Performance in Detail
Hercules Technology's total investment income came in at $34.0
million, inching down 1.5% from the prior-year quarter. The fall
was due to a decline in total fees, partially offset by an increase
in total interest income. Moreover, the figure fell short of the
Zacks Consensus Estimate of $35.0 million.
Total operating expenses were $15.5 million, down 8.7% from the
prior-year quarter. The fall was prompted by a decline in all the
components, partly offset by a rise in stock-based compensation.
As of Jun 30, 2014, the weighted average cost of debt comprising
interest and fees, was 6.3% versus 6% as of Jun 30, 2013.
Net investment income (before investment gains and losses) for the
quarter came in at $18.6 million, up 5.3% year over year.
The fair value of Hercules Technology's total investment portfolio
was $991.3 million as of Jun 30, 2014, up 11.3% from Mar 31, 2014.
In the quarter, the company provided approximately $173.0 million
in debt and equity-financing commitment to new and existing
As of Jun 30, 2014, Hercules Technology's net asset value was
$10.42 per share, compared with $10.09 as of Jun 30, 2013.
As Hercules Technology continues to make meaningful investments in
booming sectors such as technology, we foresee further scope for
top-line growth. Moreover, increased capital-deployment activities
pursued by the company are expected to boost investors'
confidence. Nevertheless, an uncertain economic environment
might increase cost of funding and limit the company's growth going
Currently, Hercules Technology carries a Zacks Rank #2 (Buy).
Other Mortgage Investment Firms
Among other mortgage investment companies,
Ares Capital Corpo.
) reported second-quarter 2014 core earnings of 34 cents per share,
which missed the Zacks Consensus Estimate of 37 cents.
American Capital, Ltd.
) reported second-quarter 2014 net operating income per share of 9
cents, significantly lagging the Zacks Consensus Estimate of 20
THL Credit, Inc.
) is expected to release results on Aug 11.
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