Shares of Oaktree Specialty Lending slumped Thursday after the company warned of performance challenges in its recent quarter.
The stock was down 7.1% to $19.68 in afternoon trading, on pace for its largest percent drop since March 2020. Shares are down 3.5% since the start of the year.
In the fiscal first quarter, the Los Angeles-based specialty finance company total investment income fell sequentially to $98 million from $101.9 million in the previous quarter, missing the $99.6 million expected by analysts.
Chief Executive Armen Panossian said the company experienced “idiosyncratic performance challenges at four portfolio investments.” That caused a decline in net asset value and an increase in nonaccrual investments, or a loan that is no longer accruing interest, the company said.
“We are drawing upon Oaktree’s deep resources and expertise in navigating turnarounds, and we believe we are well-positioned to manage these specific situations and maintain strong overall credit quality,” Panossian said.
Oaktree Specialty Lending’s posted a profit of 14 cents a share, compared with 22 cents a share a year earlier. Analysts expected a per-share profit of 62 cents.