Oaktree Specialty Lending Corp (OCSL) experienced a 5.01% pre-market plunge on Tuesday, following the release of its mixed first fiscal quarter 2025 results and concerns over its investment portfolio performance.
The company reported an adjusted net investment income of $0.54 per share for the quarter ended December 31, 2024, down from $0.57 in the year-ago period, though beating analysts' expectations of $0.53. However, total investment income declined to $86.6 million from $98 million a year earlier, missing estimates of $90.4 million.
Oaktree Specialty Lending's investment portfolio faced challenges, with several underperforming borrowers and a significant increase in non-accrual investments. The fair value of non-accrual investments grew to 3.9% of the debt portfolio, up from 4% in the previous quarter. Additionally, the company reported net realized and unrealized losses of $37.1 million, primarily due to losses on certain debt and equity investments.