WhiteHorse Finance misses Q2 2024 estimates on income and revenue

WhiteHorse Finance reported second-quarter 2024 results on August 6 that came in below analyst expectations, with net investment income of $0.42 per share versus a $0.44 consensus estimate and total investment income of $35.2 million versus the expected $36.1 million. The business development company (public lender to smaller firms) also posted weaker year-on-year figures, with net investment income down from $0.45 per share and total investment income down from $36.5 million in Q2 2023. Net asset value per share fell to $13.89 from $14.10 at the end of the prior quarter. The shortfall was tied mainly to lower-than-expected prepayment activity and a slight decline in the portfolio's average yield. WhiteHorse said its portfolio remained diversified across 64 companies with an approximate fair value of $655 million, and management said credit quality was stable with no new non-accruals (loans no longer accruing interest) during the quarter. Shares traded modestly lower after hours following the release. The stock is down about 10% over the past 12 months, while its quarterly dividend has remained steady at $0.355 per share, leaving dividend sustainability and portfolio health at the center of the investment case as the BDC sector faces pressure from tighter yields and higher funding costs.

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