Yahoo Finance Oxford Square Capital Corp (OXSQ) Q1 Earnings: Mixed Results Against Analyst Expectations
Net Investment Income: Reported at $6.54 million for Q1 2024, slightly exceeding the prior year's $6.49 million.
Net Asset Value per Share: Decreased to $2.42 as of March 31, 2024, from $2.55 at the end of 2023.
Total Investment Income: Fell to $10.68 million in Q1 2024 from $12.94 million in Q1 2023, indicating a decline in revenue from investments.
Net Unrealized Depreciation: Saw a net change in unrealized depreciation on investments of approximately -$211,000 during the quarter.
Net Decrease in Net Assets from Operations: Recorded a net decrease of $1.77 million in Q1 2024, contrasting with a net increase of $6.27 million in the same period last year.
Market Value Total Return: Achieved a significant total return based on market value of 14.63% for Q1 2024.
Distributions: Declared regular monthly distributions of $0.035 per share for the months ending July, August, and September 2024.
Oxford Square Capital Corp (NASDAQ:OXSQ) disclosed its financial outcomes for the first quarter ended March 31, 2024, in its recent 8-K filing. The company, a prominent player in the asset management sector focusing on corporate debt and CLO investments, reported a net investment income per share of $0.11, slightly below the analyst estimate of $0.13. Total revenue for the quarter was reported at $10.68 million, falling short of the anticipated $12.00 million.
Company Overview
Oxford Square Capital Corp is a closed-end, non-diversified management investment company. It primarily invests in corporate debt securities and collateralized loan obligation (CLO) structured finance investments. The capital is typically utilized by corporate borrowers for purposes such as organic growth, acquisitions, recapitalizations, and working capital across various industries including IT Consulting, Healthcare, and Telecommunication Services.
Financial Performance Analysis
The company's net asset value (NAV) per share saw a decrease from $2.55 at the end of December 2023 to $2.42 by March 31, 2024. This decline in NAV reflects a challenging quarter, with a net decrease in net assets resulting from operations of approximately $1.77 million. This contrasts starkly with the net increase of $6.27 million in the same quarter of the previous year. The total net realized losses on investments significantly impacted the financials, amounting to $8.09 million.
Liabilities and Asset Management
OXSQ's total assets decreased slightly from $277.67 million at the end of December 2023 to $275.29 million by the end of March 2024. The company's liabilities stood at $130.95 million, with notes payable being a significant component, reflecting ongoing financial commitments. The management of assets and liabilities, especially in the volatile market of corporate debt securities, remains a critical area for potential investors to watch.
Future Outlook and Distributions
Looking ahead, OXSQ announced distributions of $0.035 per share for the months ending July, August, and September 2024. This consistent distribution strategy might appeal to income-focused investors, despite the challenges in asset valuation and income generation evidenced in the quarterly performance.
Market and Net Asset Value Performance
The market response has been somewhat positive, with the per-share market value increasing from $2.86 at the beginning of the period to $3.17 at the end of March 2024. This increase in market value, coupled with a total return based on market value of 14.63%, suggests a favorable investor outlook despite the operational challenges during the quarter.
Conclusion
While Oxford Square Capital Corp faces hurdles with asset depreciation and net losses, the strategic management of investment portfolios and consistent distribution payments could provide a balanced approach for risk-averse investors. The company's focus on diverse industries and structured finance investments continues to offer potential for risk-adjusted returns, making it a noteworthy consideration for investors in the asset management sector.
Contact Information
For further details or inquiries, Bruce Rubin can be contacted at 203-983-5280.
Explore the complete 8-K earnings release (here) from Oxford Square Capital Corp for further details.
This article first appeared on GuruFocus.
