Blue Owl Capital Declines 5.5% Since Q3 Earnings Miss on High Costs

Blue Owl Capital Corporation OBDC shares have declined 5.5% since it reported weaker-than-expected third-quarter results on Nov. 5, 2025. Elevated expense level and lower prepayment-related income and interest income from debt investments affected the results. OBDC also agreed to merge with OBDC II, where OBDC will be the surviving company.OBDC reported third-quarter 2025 adjusted earnings per share (EPS) of 36 cents, which missed the Zacks Consensus Estimate by 7.7%. Also, the bottom line decreased 23.4% year over year.Total investment income advanced 11.6% year over year to $453.1 million. However, the top line missed the consensus mark by 1.8%.Blue Owl Capital Corporation Price, Consensus and EPS Surprise Blue Owl Capital Corporation price-consensus-eps-surprise-chart | Blue Owl Capital Corporation QuoteKey Insights From Q3Adjusted net investment income of $183.3 million fell 0.9% year over year. New investment commitments were $1.3 billion across 13 new portfolio companies and 23 existing ones.Blue Owl Capital ended the third quarter with investments in 238 portfolio companies, backed with an aggregate fair value of $17.1 billion. Based on the fair value, the average investment size in each portfolio company was $72 million as of Sept. 30, 2025.Total expenses increased 19.5% year over year to $259.9 million in the third quarter, due to higher interest expenses and management fees. OBDC recorded an adjusted net increase in net assets resulting from operations of $128.2 million, which decreased 5.3% year over year.Financial Update (as of Sept. 30, 2025)Blue Owl Capital exited the third quarter with a cash balance of $317.2 million, which declined from the 2024-end level of $505.7 million. Total assets of $17.6 billion increased from the $13.9 billion figure at 2024-end.Debt was $9.5 billion, up from the $7.5 billion figure as of Dec. 31, 2024. OBDC had $2.9 billion of undrawn capacity under its credit facilities. At the third-quarter end, net debt to equity was 1.22X.Net operating cash flow in the first nine months of 2025 was $918.6 million, while the company used $285.7 million of net cash in operations in the prior-year comparable period. Dividend & Repurchase UpdateThe board of directors at Blue Owl Capital declared a third-quarter 2025 regular dividend of 37 cents per share, but did not provide a quarterly supplemental dividend.Blue Owl Capital announced a new repurchase program (expiring in 18 months from the approval date of Nov. 4, 2025), under which it may purchase shares up to $200 million. The company did not make share repurchases in the third quarter.OBDC currently has a Zacks Rank #4 (Sell).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.How did Other Finance Stocks Perform in Q3?Here are some stocks in the broader Finance space that have also reported earnings for this quarter: Euronet Worldwide, Inc. EEFT, Ares Capital Corporation ARCC and Virtu Financial, Inc. VIRT.Euronet Worldwide reported third-quarter 2025 adjusted earnings per share of $3.62, which beat the Zacks Consensus Estimate by 1.4%. The bottom line rose 19% year over year. The quarterly earnings benefited from strategic buyouts, investments in digital and Dandelion products, and global expansions. However, Euronet Worldwide’s increased expense level partially offset the positives.Ares Capital Corporation’s third-quarter 2025 core earnings of 50 cents per share met the Zacks Consensus Estimate, supported by higher total investment income. Also, the company’s robust portfolio activities aided its results. However, higher expenses acted as a spoilsport. Ares Capital Corporation’s bottom line fell 13.8% from the prior-year quarter.Virtu Financial reported third-quarter adjusted earnings per share of $1.05, which beat the Zacks Consensus Estimate by 8.3% and increased 28% year over year. The strong quarterly results benefited from the improved commissions and technology services revenues. Strong performance in both the Market Making and Execution Services segments, driven by increased trading activity, also contributed to the upside. However, the upside was partly offset by Virtu Financial’s elevated expense level.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.See "2nd Wave" AI stocks now >>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 Euronet Worldwide, Inc. (EEFT): Free Stock Analysis Report Virtu Financial, Inc. (VIRT): Free Stock Analysis Report Blue Owl Capital Corporation (OBDC): 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