FS KKR Capital (NYSE:FSK) Announces Quarterly Earnings Results

Key Points

• FS KKR Capital reported quarterly EPS of $0.41, below the $0.44 consensus, and revenue of $304 million, also under expectations. Revenue fell 24% year over year from the same quarter last year.
• Management and KKR announced a support package including a $150 million tender offer at $11, a $150 million convertible preferred issuance, and a $300 million share repurchase authorization. They also plan to reduce and de-risk the balance sheet while targeting more than $500 million in net repayments in Q2.
• The company’s NAV declined 9.9% to $18.83, with higher non-accruals and several credit-specific weaknesses weighing on results. FSK also said it will focus more on first-lien and asset-based finance as it works to stabilize credit performance.

FS KKR Capital (NYSE:FSK - Get Free Report) announced its earnings results on Monday. The company reported $0.41 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.44 by ($0.03), FiscalAI reports. The company had revenue of $304.00 million for the quarter, compared to the consensus estimate of $316.81 million. FS KKR Capital had a net margin of 0.72% and a return on equity of 5.21%. The firm's revenue was down 24.0% compared to the same quarter last year. During the same period last year, the business posted $0.65 EPS.

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

• FSK and KKR announced a coordinated support package including a $150M fixed‑price tender at $11, a $150M convertible perpetual preferred (5% cash / 7% PIK, conversion tied to the $18.83 NAV), a $300M share repurchase authorization, and a 4‑quarter waiver of 50% of KKR’s subordinated income incentive fee to help stabilize the stock and distributions.
• FSK reported a 9.9% NAV decline (ending NAV $18.83) and GAAP net investment income of $0.42 per share; name‑specific credit events (e.g., Medallia marked to $0.54, ATX, PRG, Affordable Care) and higher non‑accruals (8.1% cost / 4.2% fair value) drove the weakness.
• Management plans to shrink and de‑risk the balance sheet — reducing new originations, focusing on first‑lien/asset‑based finance, targeting deleveraging while executing buybacks, and expecting >$500M net repayments in Q2 with pro‑forma liquidity of ~$2.3B.
• Portfolio backdrop: ~60% first‑lien (≈69% look‑through including JV), senior secured ~64–73%, software & services ~16% across 52 issuers with an internal AI‑risk review showing ~86% of the portfolio as low AI risk and median LTV ~38%, which management says supports credit resilience but could lengthen hold periods.

FS KKR Capital Trading Up 0.2%

NYSE FSK traded up $0.02 during mid-day trading on Monday, reaching $10.86. 4,846,373 shares of the stock were exchanged, compared to its average volume of 3,729,846. The business's fifty day simple moving average is $10.66 and its 200 day simple moving average is $13.27. FS KKR Capital has a 1-year low of $9.72 and a 1-year high of $22.68. The company has a debt-to-equity ratio of 1.31, a quick ratio of 3.05 and a current ratio of 3.05. The stock has a market capitalization of $3.04 billion, a PE ratio of 362.03 and a beta of 0.85.

FS KKR Capital Announces Dividend

The firm also recently declared a special dividend, which was paid on Thursday, April 2nd. Stockholders of record on Wednesday, March 18th were given a $0.03 dividend. The ex-dividend date was Wednesday, March 18th. This represents a dividend yield of 118.0%. FS KKR Capital's dividend payout ratio is currently 6,000.00%.

Analysts Set New Price Targets

Several brokerages have recently commented on FSK. B. Riley Financial decreased their price objective on FS KKR Capital from $17.50 to $11.00 and set a "neutral" rating for the company in a report on Tuesday, March 3rd. Truist Financial lowered their target price on FS KKR Capital from $17.00 to $11.00 and set a "hold" rating on the stock in a report on Wednesday, March 4th. Weiss Ratings lowered shares of FS KKR Capital from a "hold (c-)" rating to a "sell (d+)" rating in a research report on Thursday, March 5th. Royal Bank Of Canada reduced their price target on shares of FS KKR Capital from $15.00 to $13.00 and set a "sector perform" rating on the stock in a research report on Monday, April 6th. Finally, Keefe, Bruyette & Woods reduced their price target on shares of FS KKR Capital from $15.00 to $11.00 and set a "market perform" rating on the stock in a research report on Thursday, April 16th. Seven equities research analysts have rated the stock with a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, the stock currently has an average rating of "Reduce" and a consensus price target of $11.08.

Insider Transactions at FS KKR Capital

In other FS KKR Capital news, insider Daniel Pietrzak acquired 5,000 shares of the stock in a transaction that occurred on Friday, February 27th. The stock was acquired at an average price of $11.25 per share, with a total value of $56,250.00. Following the transaction, the insider directly owned 64,800 shares in the company, valued at approximately $729,000. This represents a 8.36% increase in their ownership of the stock. The acquisition was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. 0.18% of the stock is owned by corporate insiders.

Institutional Trading of FS KKR Capital

A number of institutional investors have recently made changes to their positions in the stock. Van ECK Associates Corp lifted its stake in shares of FS KKR Capital by 2.4% in the 4th quarter. Van ECK Associates Corp now owns 4,083,940 shares of the company's stock worth $60,484,000 after acquiring an additional 94,262 shares during the period. UBS Group AG lifted its stake in FS KKR Capital by 12.1% during the third quarter. UBS Group AG now owns 3,300,094 shares of the company's stock valued at $49,270,000 after purchasing an additional 355,745 shares during the last quarter. Oak Hill Advisors LP acquired a new stake in FS KKR Capital during the fourth quarter valued at approximately $38,659,000. Balyasny Asset Management L.P. acquired a new stake in FS KKR Capital during the third quarter valued at approximately $21,917,000. Finally, Franklin Resources Inc. lifted its stake in FS KKR Capital by 53.8% during the fourth quarter. Franklin Resources Inc. now owns 1,006,118 shares of the company's stock valued at $14,901,000 after purchasing an additional 351,798 shares during the last quarter. 36.26% of the stock is owned by institutional investors and hedge funds.

FS KKR Capital Company Profile

FS KKR Capital Corp NYSE: FSK is a closed-end, externally managed business development company that primarily invests in private middle-market U.S. companies. The firm seeks to generate current income and capital appreciation by structuring investments in floating-rate senior secured loans, unitranche financings, second lien debt and mezzanine instruments. As a business development company, FSK provides financing solutions designed to support growth initiatives, acquisitions, leveraged buyouts and recapitalizations for privately held enterprises.

Established in 2018 through a strategic partnership between FS Investment Corporation and KKR Credit Advisors, a division of global investment firm KKR & Co Inc, FSK combines the credit underwriting capabilities of KKR’s global platform with FS’s expertise in private credit markets.

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