Sound Point Meridian Capital (NYSE:SPMC) Releases Quarterly Earnings Results, Misses Estimates By $0.06 EPS

Key Points

• Sound Point Meridian Capital missed earnings expectations, reporting quarterly EPS of $0.24 versus the $0.30 consensus estimate, a $0.06 shortfall.
• Net investment income fell below distributions, prompting the company to plan a reduction in its monthly distribution to $0.13 per share in Q4 2026 from $0.20 in Q3, amid spread tightening and higher reserves for AI-exposed software loans.
• Despite the income pressure, NAV per share increased to $9.88 from $9.63, while management is shifting toward secondary-market CLO investments that it expects can generate mid- to high-teens yields; shares fell 8.4% following the results.

Sound Point Meridian Capital (NYSE:SPMC - Get Free Report) posted its quarterly earnings data on Wednesday. The company reported $0.24 earnings per share for the quarter, missing the consensus estimate of $0.30 by ($0.06), Zacks reports.

Here are the key takeaways from Sound Point Meridian Capital's conference call:

• Net investment income was below distributions at $0.24 per share versus $0.60 paid, driven by spread tightening and higher modeled loss reserves for AI-impacted software loans.
• The company cut its planned monthly distribution to $0.13 per share for Q4 2026 from $0.20 in Q3, reflecting income compression and a desire to preserve balance-sheet flexibility.
• NAV per share rose to $9.88 from $9.63, supported by unrealized appreciation in CLO equity investments; portfolio GAAP yield also improved to 9.8% from 9.1%, with management citing approximately 10.1% in July.
• Management is rotating from lower-yielding or higher-risk CLO equity into secondary-market positions, which it says can offer mid- to high-teens yields; year-to-date trading has added roughly 100 basis points of portfolio yield.
• AI-related software exposure represents roughly 10%–12% of the look-through portfolio, and the company is reducing exposure to the most vulnerable individual credits while favoring defensive sectors and monitoring broader credit-market volatility.

Sound Point Meridian Capital Stock Down 8.4%

NYSE SPMC traded down $0.90 on Wednesday, hitting $9.87. The company's stock had a trading volume of 95,547 shares, compared to its average volume of 33,154. Sound Point Meridian Capital has a 1-year low of $8.36 and a 1-year high of $18.54. The firm has a market cap of $202.31 million, a PE ratio of -1.61 and a beta of 1.15. The company's 50-day moving average is $10.42 and its 200 day moving average is $10.60.

Sound Point Meridian Capital Dividend Announcement

The firm also recently announced a monthly dividend, which will be paid on Wednesday, September 30th. Shareholders of record on Tuesday, September 15th will be issued a dividend of $0.20 per share. This represents a c) dividend on an annualized basis and a yield of 24.3%. The ex-dividend date of this dividend is Tuesday, September 15th. Sound Point Meridian Capital's payout ratio is presently -39.09%.

Hedge Funds Weigh In On Sound Point Meridian Capital

Institutional investors have recently added to or reduced their stakes in the business. Kim LLC acquired a new stake in shares of Sound Point Meridian Capital in the 2nd quarter valued at about $192,821,000. Marshall Wace LLP raised its stake in shares of Sound Point Meridian Capital by 35.4% during the 2nd quarter. Marshall Wace LLP now owns 77,152 shares of the company's stock worth $1,379,000 after purchasing an additional 20,163 shares during the period. Citadel Advisors LLC bought a new stake in shares of Sound Point Meridian Capital in the third quarter valued at $267,000. Thomas J. Herzfeld Advisors Inc. purchased a new position in Sound Point Meridian Capital in the 4th quarter valued at approximately $189,000. Finally, Virtus Investment Advisers LLC increased its holdings in Sound Point Meridian Capital by 7.5% during the 4th quarter. Virtus Investment Advisers LLC now owns 29,620 shares of the company's stock worth $407,000 after acquiring an additional 2,061 shares during the period.

Analyst Upgrades and Downgrades

Several brokerages have recently weighed in on SPMC. Alliance Global Partners restated a "buy" rating on shares of Sound Point Meridian Capital in a report on Wednesday, May 27th. Zacks Research raised shares of Sound Point Meridian Capital from a "strong sell" rating to a "hold" rating in a report on Tuesday, July 28th. Finally, B. Riley Financial restated a "neutral" rating on shares of Sound Point Meridian Capital in a report on Wednesday. One investment analyst has rated the stock with a Buy rating and three have given a Hold rating to the company's stock. According to MarketBeat, Sound Point Meridian Capital has an average rating of "Hold" and an average target price of $15.12.

Sound Point Meridian Capital Company Profile

Sound Point Meridian Capital Inc is an externally managed, non-diversified closed-end management investment company. Its investment objective is to generate high current income, with a secondary objective to generate capital appreciation, by investing primarily in third-party collateralized loan obligation equity and mezzanine tranches. Sound Point Meridian Capital Inc is based in NEW YORK.

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