(Reuters) – Small business lender Ares Capital Corp (ARCC.O), which is buying struggling rival Allied Capital Corp (ALD.N), reported a fourth-quarter profit which beat market estimates helped by higher investment spreads and higher structuring fees.
Net investment income rose to $38.4 million, or 35 cents a share, from $32.1 million, or 33 cents a share, a year ago.
Analysts on average had expected the company to earn 33 cents a share, excluding items, according to Thomson Reuters I/B/E/S.
Excluding costs associated with the Allied acquisition, the company earned 37 cents a share.
“Our strong core and GAAP quarterly earnings per share resulted from a 35 basis point increase in our weighted average investment spread, higher structuring fees and improved credit trends,” President Michael Arougheti said in a statement.
The company’s net income was $69.6 million, or 64 cents a share, compared with a loss of $110.5 million or $1.14 a share last year.
Ares posted a net realized loss of $41.7 million, or 38 cents a share, compared with a gain of $1.6 million, or 2 cents a share, a year ago.
The company said it made $344.4 million in new commitments across five new portfolio companies and five existing portfolio companies in the fourth quarter.
Shares of the company were up 1 percent at $12.98 before the bell Thursday. They closed at $12.80 Wednesday on Nasdaq. (Reporting by Jochelle Mendonca in Bangalore; Editing by Gopakumar Warrier)