Capital Southwest Extends Pre-Tax Income Decline
The company estimated June-quarter net asset value at $16.55 to $16.65 a share.
Capital Southwest (CSWC), a business-development company, estimated pre-tax net investment income of $0.57 to $0.58 a share for the June quarter, extending a two-quarter decline.
The range stood below the $0.59 recorded in the March quarter and $0.60 in the December quarter. It was also $0.02 below both endpoints of Capital Southwest’s preliminary March-quarter range, showing that the downward trajectory had continued.
Preliminary net investment income moved in the other direction. Capital Southwest estimated the measure at $0.58 to $0.59 a share, $0.01 above both endpoints of the prior quarter’s preliminary range, even as the pre-tax estimate declined.
Net asset value weakened alongside pre-tax income. The June 30 estimate implied a sequential decline of $0.04 to $0.14 a share from the finalized March 31 level of $16.69, which had already slipped from $16.75 at the end of December.
The latest NAV range also shifted lower relative to Capital Southwest’s preliminary March-quarter estimate of $16.67 to $16.72 a share. The bottom of the range fell $0.12, while the top declined $0.07.
The softer per-share measures followed continued portfolio expansion through March. Investments reached about $2.1 billion at fair value as of March 31, up from roughly $2.0 billion at the end of December and $1.9 billion at the end of September, leaving the June-quarter estimates to mark how that larger portfolio translated into income and book value.