Ares Capital's Q2 Earnings Coming Up: What's in Store for ARCC?

Ares Capital Corporation ARCC is slated to report second-quarter 2025 results on July 29, before the opening bell. Its revenues and earnings are expected to have declined on a year-over-year basis.

In the last reported quarter, ARCC’s earnings missed the Zacks Consensus Estimate. Results were primarily affected by lower portfolio exits and gross commitments. Yet, an improvement in the total investment income, lower expenses and the company’s robust activities offered some support.

Ares Capital has a weak earnings surprise history. The company’s earnings lagged the Zacks Consensus Estimate in three and beat in one of the trailing four quarters.

ARCC’s Earnings & Sales Projections for Q2

The Zacks Consensus Estimate for ARCC’s earnings is pegged at 51 cents, stable over the past seven days. The figure indicates 16.4% decrease from the prior-year quarter.

The consensus estimate for sales is pegged at $746.7 million, which suggests a 1.1% fall.

Other Key Estimates for ARCC’s Q2 Earnings

The Zacks Consensus Estimate for interest income from investments (constituting a significant portion of the company’s total investment income) is pegged at $536.8 million, indicating a marginal dip from the prior-year quarter. 

The consensus estimate for capital structuring service fees is pegged at $46.9 million, implying a 19.2% decline. 

The consensus mark for other income is pegged at $16.8 million, indicating a 12% rise. The Zacks Consensus Estimate for dividend income of $143.98 million suggests slight growth. 

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.

Earnings Whispers for ARCC

Our quantitative model does not conclusively predict an earnings beat for Ares Capital this time. 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’re reported with our Earnings ESP Filter.

Earnings ESP: Ares Capital has an Earnings ESP of 0.00%.

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

Finance Sector Stocks Worth a Look

Here are a couple of finance sector 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 Moody’s MCO is +2.41% and it carries a Zacks Rank #3 at present. The company is slated to report second-quarter 2025 results on July 23.

Over the past 30 days, the Zacks Consensus Estimate for MCO’s quarterly earnings has been revised 3.6% upward to $3.42.

Moelis & Company MC is also scheduled to release second-quarter 2025 earnings on July 24. The company, which carries a Zacks Rank #2 (Buy) at present, has an Earnings ESP of +1.82%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

MC’s quarterly earnings estimates have been revised 7.7% north at 28 cents over the past month.

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

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