American Capital Ltd. Net Operating Income Falls By 69%

American Capital (NASDAQ: ACAS  )  announced its operating income before taxes stood at $16 million, or $0.06 per share in the first quarter of 2014, a decline of 69% relative to the $52 million recognized in the fourth quarter of 2013. In addition its net operating income was down more than 75% relative to the first quarter of 2013, when it stood at $68 million. 

The biggest reason behind the drop was significant decreases in both of its sources of revenue. Fee income at American Capital was cut in half, to $13 million, from the fourth quarter to the first quarter. In addition, its interest and dividend income fell by 23%, from $92 million to $71 million.

However, the company did note its net earnings stood at $70 million, well above the loss of $182 million seen in the fourth quarter of 2013. In the fourth quarter, American Capital saw its investments depreciate on an unrealized basis by $261 million, which resulted in its overall loss.

In addition, American Capital announced Goldman Sachs was retained as a financial advisor as it evaluated whether or not to separate its asset management business from its investment assets, which was announced in March.

"We have made progress evaluating our corporate structure," noted the CEO of American Capital, Malon Wilkus, in the announcement. "In addition to engaging Goldman Sachs, our Board of Directors suspended our Share Repurchase and Dividend Program, as we evaluate the capital requirements of our alternatives."

Even despite the lessened net operating income, in total, American Capital did see its net asset value per share rise to $19.29, representing a gain of 7%.

Dividend stocks for the next decade
The Motley Fool's top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2948403, ~/Articles/ArticleHandler.aspx, 7/23/2014 5:22:47 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

TREND TRACKER: Get Rich When the Web Goes Dark

It's time to say "goodbye" to your Internet! One bleeding-edge technology is about to put the World Wide Web to bed. And if you act right away, it could make you wildly rich. Experts are calling it the single largest business opportunity in the history of capitalism… The Economist is calling it "transformative"... but you'll probably just call it "how I made my millions." Big money is already on the move. Don't be too late to the party – find out the 1 stock to own when the Web goes dark.


Advertisement