NEW YORK, Jan. 12, 2018 /PRNewswire/ — Middle market private companies in the Golub Capital Altman Index experienced year-over-year earnings growth of 12.8% and revenue growth of 11.5% during the first two months of the fourth quarter of 2017. This compares to year-over-year earnings growth of 4.9% and revenue growth of 6.8% in the third quarter of 2017.
Lawrence E. Golub, CEO of Golub Capital, said, “Middle market companies had an outstanding fourth quarter of 2017, building on the strong performance we saw in the third quarter. Revenue and earnings accelerated to the fastest rates of year-over-year growth since inception of the Golub Capital Altman Index. The fourth quarter’s robust growth was accompanied by profit margin expansion, which suggests that the U.S. economy has strong momentum going into 2018.”
Dr. Edward I. Altman said, “The data shows improved company performance in all sectors. The Technology sector, strong throughout the year, had median earnings growth of nearly 30% year-over-year. The Consumer and Industrials sectors continued to rebound since the lackluster first quarter of 2017. Even the Healthcare sector, which has struggled with profitability, ended a five-quarter streak of declining earnings.”
“In 2017, the Golub Capital Middle Market Report provided important value to the investment community by flagging major trend changes in earnings growth rates and sector performance,” said Golub. “We reported accelerating revenue growth in Q1 and accelerating earnings growth in Q2 and Q3, each of which were followed by favorable earnings surprises from public companies. When we published our Q2 and Q3 reports, we discussed that GDP growth seemed to be exceeding consensus forecasts, with GDP growing at or above 3%, and we were right. We highlighted the strength of the Technology sector throughout the year and identified rebounds in the Consumer and Industrials sectors. We expect the Golub Capital Middle Market Report to continue to provide early insight into economic trends.”
The Golub Capital Altman Index (“GCAI”), which is produced by Golub Capital in collaboration with renowned credit expert Dr. Edward I. Altman, is the first and only index based on actual revenue and earnings (defined as earnings before interest, taxes, depreciation and amortization, or “EBITDA”) for middle market companies. It measures the median revenue and earnings growth of more than 150 private U.S. companies in the loan portfolio of Golub Capital, a leading middle market lender. Reported shortly before public company quarterly earnings