American Capital Earnings: Here’s Why Investors Don’t Like These Results

American Capital, Ltd. (NASDAQ:ACAS) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 2.97%.

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American Capital, Ltd. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 41.67% to $0.14 in the quarter versus EPS of $0.24 in the year-earlier quarter.

Revenue: Decreased 80.44% to $133 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: American Capital, Ltd. reported adjusted EPS income of $0.14 per share. By that measure, the company missed the mean analyst estimate of $0.27. It missed the average revenue estimate of $156.93 million.

Quoting Management: “Our asset management business continues its strong performance,” said John Erickson, Chief Financial Officer. “As of the end of the quarter, it had $15 billion of earning assets under management, a 20% increase from year end. It successfully added $2.4 billion of earning assets in its residential mortgage businesses and sponsored the issuance of a $414 million CLO during the quarter. We look forward to continued growth and expansion of our asset management business in 2013.”

Key Stats (on next page)…

Revenue increased 3.91% from $128 million in the previous quarter. EPS decreased 61.11% from $0.36 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.26 to a profit $0.28. For the current year, the average estimate has moved up from a profit of $1.05 to a profit of $1.13 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at]