Ares Capital Q3 Earnings Meet Estimates, Total Investment Income Rises

Ares Capital Corporation’s ARCC third-quarter 2025 core earnings of 50 cents per share met the Zacks Consensus Estimate. However, the bottom line reflected a decline of 13.8% from the prior-year quarter.The results were primarily aided by higher total investment income. Also, the company’s robust portfolio activities offered some support. However, higher expenses acted as a spoilsport.GAAP net income was $404 million or 57 cents per share compared with $394 million or 62 cents per share in the prior-year quarter.ARCC’s Total Investment Income Increases, Expenses RiseTotal investment income was $782 million, up roughly 1% year over year. The rise was primarily driven by higher capital structuring service fees and other income. The top line beat the Zacks Consensus Estimate of $763.7 million.Total quarterly expenses were $433 million, up 7.7% year over year. The rise was mainly due to higher interest and credit facility fees, and base management fee.Portfolio Activities Robust for ARCCIn the third quarter, the company made gross commitments worth $3.92 billion to new and existing portfolio companies, flat compared with the prior-year quarter.The company exited the quarter with $2.63 billion of commitments compared with $2.60 billion a year ago.The fair value of Ares Capital’s portfolio investments was $28.7 billion as of Sept. 30, 2025.The fair value of accruing debt and other income-producing securities was $25.9 billion.Ares Capital’s Balance Sheet StrongAs of Sept. 30, 2025, the company’s cash and cash equivalents totaled $1.04 billion, up from $635 million as of Dec. 31, 2024.Ares Capital had $5.2 billion available for additional borrowings under the existing credit facilities as of Sept. 30, 2025. Total outstanding debt was $15.6 billion.As of Sept. 30, 2025, total assets were $30.8 billion and stockholders’ equity was $16.5 billion.Net asset value was $20.01 per share, up from $19.89 as of Dec. 31, 2024.Our Take on ARCCDriven by the rise in the demand for customized financing, growth in total investment income is expected in the near term. Increased investment commitments will likely keep supporting ARCC’s financials. However, its expansion strategies may lead to a rise in costs in the near term. Regulatory constraints pose another major headwind.Ares Capital Corporation Price, Consensus and EPS Surprise Ares Capital Corporation price-consensus-eps-surprise-chart | Ares Capital Corporation QuoteCurrently, ARCC carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Earnings Dates & Expectations for ARCC’s PeersHercules Capital, Inc. HTGC is slated to report third-quarter 2025 numbers on Oct. 30.Over the past seven days, the Zacks Consensus Estimate for Hercules Capital’s quarterly earnings has been unchanged at 48 cents. The estimate indicates a 5.9% decline from the prior-year quarter’s actual.Main Street Capital MAIN is scheduled to announce third-quarter 2025 results on Nov. 6.Over the past seven days, the Zacks Consensus Estimate for Main Street Capital’s quarterly earnings has been unchanged at $1.04. This implies a 4% rise from the prior-year quarter’s actual.#1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ares Capital Corporation (ARCC): Free Stock Analysis Report Hercules Capital, Inc. (HTGC): Free Stock Analysis Report Main Street Capital Corporation (MAIN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks