FS KKR Capital (NYSE:FSK) Issues Earnings Results

Key Points

• FS KKR Capital beat quarterly estimates, reporting $0.46 per share versus the $0.40 consensus and revenue of $294 million versus $274.6 million expected. However, per-share income was down from $0.57 a year earlier and included a non-recurring Belk dividend and an incentive-fee waiver benefit.
• Net asset value slipped to $18.28 per share from $18.30, with portfolio value declining $0.19 per share. Non-accruals improved overall, but two investments totaling $142 million at cost were newly placed on non-accrual.
• The company repurchased 6.2 million shares for about $69 million during the quarter and declared a $0.44-per-share fourth-quarter distribution plus a $0.20 special distribution.

FS KKR Capital (NYSE:FSK - Get Free Report) posted its quarterly earnings data on Thursday. The company reported $0.46 EPS for the quarter, topping analysts' consensus estimates of $0.40 by $0.06, Zacks reports. FS KKR Capital had a positive return on equity of 9.70% and a negative net margin of 28.52%. The firm had revenue of $294.00 million for the quarter, compared to analyst estimates of $274.61 million. During the same quarter last year, the company earned $0.57 EPS.

Here are the key takeaways from FS KKR Capital's conference call:

• Third-quarter net investment income was $0.46 per share, but included a non-recurring $25 million Belk dividend that added $0.08 per share and a $12 million benefit from KKR’s incentive-fee waiver. Management expects fourth-quarter net investment income at an annualized 8%–9% of NAV, with a $17 million JW Aluminum dividend partly offsetting the absence of Belk’s payment and the usual annual excise tax.
• FSK repurchased 6.2 million shares for about $69 million during the quarter, at an average $11.24 per share, adding $0.16 to NAV per share. Cumulative repurchases reached $90 million of the $300 million program through October 30.
• NAV per share edged down to $18.28 from $18.30, including a $0.19-per-share decline in portfolio value. Non-accruals improved sequentially to 6.4% of portfolio cost and 3.4% of fair value, though two investments totaling $142 million at cost were newly placed on non-accrual.
• Management is prioritizing share repurchases, portfolio rotation and leverage reduction over net deployment, with leverage at 127% and a target range of 1.0–1.25 times. About 25% of the portfolio matures by 2028; executives highlighted software as an area of particular maturity and AI-related risk.

FS KKR Capital Trading Up 0.3%

NYSE:FSK traded up $0.04 during midday trading on Friday, hitting $11.70. The stock had a trading volume of 2,626,212 shares, compared to its average volume of 2,058,401. FS KKR Capital has a one year low of $9.72 and a one year high of $16.31. The stock has a 50-day moving average of $11.25 and a 200 day moving average of $11.29. The company has a market capitalization of $3.23 billion, a price-to-earnings ratio of 5.93 and a beta of 0.88. The company has a quick ratio of 2.28, a current ratio of 2.28 and a debt-to-equity ratio of 1.26.

FS KKR Capital Announces Dividend

The business also recently declared a special dividend, which will be paid on Tuesday, December 15th. Stockholders of record on Tuesday, December 1st will be issued a $0.20 dividend. The ex-dividend date is Tuesday, December 1st. FS KKR Capital's dividend payout ratio is presently -130.37%.

Key Stories Impacting FS KKR Capital

Here are the key news stories impacting FS KKR Capital this week:

• Positive Sentiment: Net investment income was $0.46 per share, above the $0.40 consensus estimate, while revenue of $294 million topped expectations of $274.6 million. Net investment income also improved from $0.44 in the prior quarter. FS KKR Capital Q3 Earnings and Revenues Beat Estimates
• Positive Sentiment: The company declared a fourth-quarter distribution of $0.44 per share and a special distribution of $0.20 per share, supporting its income appeal. FS KKR Capital Corp. Announces Third Quarter 2026 Results
• Neutral Sentiment: Portfolio losses narrowed from the previous quarter: total realized and unrealized losses were $0.19 per share, versus $0.56. FS KKR Capital Corp. Announces Third Quarter 2026 Results
• Negative Sentiment: Income remained below the year-ago level of $0.57 per share. Net asset value slipped to $18.28 from $18.30, and sales and repayments of $442 million exceeded new investment purchases of $335 million. Net debt-to-equity also rose to 125% from 122%, highlighting portfolio and leverage concerns. FS KKR Capital Q3 Net Investment Income Falls

Analysts Set New Price Targets

Several brokerages have recently issued reports on FSK. Wells Fargo & Company downgraded shares of FS KKR Capital from a "sector perform" rating to an "underweight" rating and set a $10.00 price target for the company. in a report on Tuesday, September 29th. Wall Street Zen raised FS KKR Capital from a "sell" rating to a "hold" rating in a research report on Saturday, August 1st. JPMorgan Chase & Co. increased their price objective on FS KKR Capital from $9.50 to $11.00 and gave the stock a "neutral" rating in a report on Wednesday, August 19th. Zacks Research raised FS KKR Capital from a "strong sell" rating to a "hold" rating in a report on Tuesday, August 11th. Finally, Weiss Ratings reaffirmed a "sell (d+)" rating on shares of FS KKR Capital in a research report on Friday, August 28th. Six analysts have rated the stock with a Hold rating and two have given a Sell rating to the stock. According to MarketBeat.com, the stock presently has a consensus rating of "Reduce" and a consensus target price of $11.43.

FS KKR Capital Company Profile

FS KKR Capital Corp. NYSE: FSK is a business development company (BDC) that provides financing to private middle-market companies. The company primarily invests in senior secured loans and other debt instruments, while also making select equity investments. Its portfolio companies generally operate across a range of industries and are typically based in the United States.

FSK is externally managed by FS/KKR Advisor, LLC, a joint venture between FS Investments and KKR. The adviser combines FS Investments' experience in serving individual and institutional investors with KKR's global investment platform and private credit capabilities.

The company traces its history to FS Investment Corporation and Corporate Capital Trust, which combined in 2018 to create FS KKR Capital Corp.

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