Earnings Preview: American Capital

American Capital (ACAS) is expected to report Q3 earnings after the market close today with a conference call scheduled for 11 am ET tomorrow.

Guidance

Analysts are looking for EPS of 12c on revenue of $155.30M. The consensus range is 6c-16c for EPS, and revenue of $145M-$167.50M, according to First Call. American Capital could become a takeover candidate after one of its competitors, Allied Capital, sold itself last week, according to Reuters today. However, the news service believes that it would be difficult for American Capital to sell itself for more than a distressed price. Indeed, some may say that American Capital's shares have been trading like the stock of a distressed company in recent months. The shares have slid to $2.59 in mid-afternoon trading today, from $4.78 on May 5. American Capital has sold several companies it had owned over the last two months for a total of around $500M, and in August one of its portfolio companies, Mirion Technolgies, filed for an IPO for as much as $100M. Investors will want to try to determine what American Capital is looking to do with the cash it obtained, or will obtain, from these deals.

Comments

[Ben Simonton:]

This stock is an easy double as management fixes, and they will, its covenant violation problems. Management got caught in mark to mark accounting, but they are extremely talented and are slowly but surely working their way out.

Nov 04 10:59 AM