Ares Capital Set to Release Q1 Earnings: What's in the Cards?

Ares Capital Corporation ARCC is scheduled to announce first-quarter 2026 results tomorrow, before market open. Similar to the last reported quarter, the company is expected to have recorded an improvement in total investment income in the to-be-reported quarter, driven by a continued rise in the demand for customized financing.

The Zacks Consensus Estimate for ARCC’s first-quarter sales is pegged at $769 million, which indicates year-over-year growth of 5.1%.

In the past seven days, the consensus estimate for earnings for the to-be-reported quarter has been unchanged at 48 cents. The estimate indicates a 4% decline from the prior-year quarter.

Estimate Revision Trend Zacks Investment Research

Image Source: Zacks Investment Research

ARCC does not have a decent or impressive earnings surprise history. The company’s earnings lagged the Zacks Consensus Estimate in two of the trailing four quarters.

Earnings Surprise History Zacks Investment Research

Image Source: Zacks Investment Research

Key Q1 Estimates for Ares Capital

The Zacks Consensus Estimate for ARCC’s interest income from investments (constituting a significant portion of total investment income) is pegged at $559.1 million, indicating a 6.3% rise from the prior-year quarter.

The consensus mark for other income is pegged at $17.7 million, indicating 4.1% rise.

The consensus estimate for capital structuring service fees is pegged at $43.9 million, implying 4.6% year-over-year fall. The Zacks Consensus Estimate for dividend income of $143 million suggests no change from the prior-year quarter.

Ares Capital has been witnessing higher expenses over the past several quarters. As the company has been investing in venture growth stage companies, operating costs are expected to have been elevated in the first quarter.

What Our Quantitative Model Unveils for ARCC

According to our quantitative model, the chances of Ares Capital beating the Zacks Consensus Estimate for earnings this time are low. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Ares Capital is 0.00%.

Zacks Rank: ARCC currently carries a Zacks Rank #4 (Sell).

Finance Stocks Worth a Look

Here are a couple of finance stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time:

The Earnings ESP for Hope Bancorp, Inc. HOPE is +7.87% and it sports a Zacks Rank #1 (Strong Buy). The company is slated to report quarterly results on April 28. You can see the complete list of today’s Zacks #1 Rank stocks here.

Over the past seven days, the Zacks Consensus Estimate for Hope Bancorp’s quarterly earnings has remained unchanged at 22 cents.

First Busey Corporation BUSE is also scheduled to report quarterly results on April 28. The company has an Earnings ESP of +4.02% and a Zacks Rank #2 (Buy).

Over the past seven days, the Zacks Consensus Estimate for First Busey’s quarterly earnings has been unchanged at 57 cents.

Story Continues

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This article originally published on Zacks Investment Research (zacks.com).

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