Ares Capital Corporation ARCC is scheduled to announce second-quarter 2026 results tomorrow, before market open. The company’s total investment income is expected to have remained resilient in the quarter, supported by continued growth in the investment portfolio and steady deployment activity, although the quarter is likely to reflect modest pressure from lower benchmark interest rates.
The Zacks Consensus Estimate for ARCC’s second-quarter sales is pegged at $769 million, which indicates year-over-year growth of 3.2%.
In the past seven days, the consensus estimate for earnings for the to-be-reported quarter has been unchanged at 47 cents. The estimate indicates a 6% decline from the prior-year quarter.
Estimate Revision Trend
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 and matched in two of the trailing four quarters.
Earnings Surprise History
Image Source: Zacks Investment Research
Key Q2 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 $515 million, indicating a 3.4% decline from the prior-year quarter.
The consensus mark for other income is pegged at $19.40 million, implying a 3% decline. The Zacks Consensus Estimate for dividend income of $157 million suggests a marginal decline from the prior-year quarter.
However, the consensus estimate for capital structuring service fees is pegged at $36.23 million, implying a 6.6% year-over-year rise.
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 second 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 -3.85%.
Zacks Rank: ARCC currently carries a Zacks Rank #3.
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 Prosperity Bancshares PB is +1.76% and it currently carries a Zacks Rank #3. The company is slated to report quarterly results tomorrow. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Over the past seven days, the Zacks Consensus Estimate for PB’s quarterly earnings has been unchanged at $1.54.
Robinhood Markets HOOD is also scheduled to report quarterly results tomorrow. The company has an Earnings ESP of +2.98% and a Zacks Rank #3.
Over the past seven days, the Zacks Consensus Estimate for HOOD’s quarterly earnings has been unchanged at 39 cents.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Ares Capital Corporation (ARCC): Free Stock Analysis Report
Prosperity Bancshares, Inc. (PB): Free Stock Analysis Report
Robinhood Markets, Inc. (HOOD): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).