American Capital Ltd. Net Operating Income Falls By 69%

Continuing the difficult run, American Capital saw its net operating income fall to $16 million, well below the $52 million in the fourth quarter.

May 7, 2014 at 5:35PM

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.

Patrick Morris has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information