FS KKR Capital (NYSE:FSK) Releases Quarterly Earnings Results, Beats Estimates By $0.01 EPS

Key Points

• FS KKR Capital beat quarterly estimates: Adjusted EPS was $0.43 versus the $0.42 consensus, while revenue reached $290 million, above the $286.75 million estimate.
• Leverage and income outlook improved: Debt-to-equity declined to 127% from 138%, liquidity stood at $3.5 billion, and management expects annualized net investment income of 8%–9% of NAV through the rest of 2026.
• Risks remain despite a higher dividend: NAV fell 2.8% to $18.30 per share, two investments entered non-accrual status, and non-accruals represented 7.1% of the portfolio at cost. The quarterly dividend increased to $0.44 per share, implying a roughly 14% yield.

FS KKR Capital (NYSE:FSK - Get Free Report) issued its quarterly earnings results on Thursday. The company reported $0.43 EPS for the quarter, beating analysts' consensus estimates of $0.42 by $0.01, FiscalAI reports. FS KKR Capital had a positive return on equity of 9.43% and a negative net margin of 28.52%.The company had revenue of $290.00 million for the quarter, compared to analyst estimates of $286.75 million. During the same period last year, the company earned ($0.75) earnings per share.

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

• Net asset value declined 2.8% to $18.30 per share, driven by a $0.56-per-share decline in portfolio valuations despite $0.44 per share of GAAP net investment income.
• Second-quarter net investment income was $0.44 per share, while adjusted net investment income was $0.43; management expects annualized net investment income of 8%–9% of NAV for the remainder of 2026.
• FSK reduced leverage, with debt-to-equity falling to 127% from 138%, and reported $3.5 billion of available liquidity. KKR also completed a $150 million share purchase and a $150 million preferred-stock investment, while FSK repurchased approximately $40 million of common stock through early third quarter.
• Portfolio rotation accelerated through roughly $500 million of third-party loan sales and $1.3 billion of net sales and repayments, helping reduce the portfolio by $735 million and shift its composition toward first-lien and senior-secured assets.
• Credit quality remains a concern: two investments entered non-accrual status, and non-accruals still represented 7.1% of the portfolio at cost and 3.8% at fair value, although both measures improved from the prior quarter.

FS KKR Capital Price Performance

Shares of NYSE FSK traded up $0.54 during mid-day trading on Friday, reaching $12.42. The company had a trading volume of 4,865,263 shares, compared to its average volume of 2,577,550. The company has a current ratio of 2.00, a quick ratio of 2.00 and a debt-to-equity ratio of 1.38. The stock has a market cap of $3.48 billion, a PE ratio of -9.20 and a beta of 0.83. The company has a 50-day moving average price of $10.75 and a two-hundred day moving average price of $11.26. FS KKR Capital has a 1-year low of $9.72 and a 1-year high of $18.85.

FS KKR Capital Increases Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Friday, October 2nd. Stockholders of record on Wednesday, September 16th will be paid a dividend of $0.44 per share. The ex-dividend date of this dividend is Wednesday, September 16th. This represents a $1.76 annualized dividend and a dividend yield of 14.2%. This is a boost from FS KKR Capital's previous quarterly dividend of $0.42. FS KKR Capital's dividend payout ratio is -85.28%.

Institutional Investors Weigh In On FS KKR Capital

Hedge funds have recently modified their holdings of the stock. Sunbelt Securities Inc. raised its holdings in FS KKR Capital by 13.7% during the 4th quarter. Sunbelt Securities Inc. now owns 59,903 shares of the company's stock worth $887,000 after buying an additional 7,203 shares during the period. Strive Financial Group LLC acquired a new position in shares of FS KKR Capital in the fourth quarter worth about $50,000. Mercer Global Advisors Inc. ADV boosted its holdings in shares of FS KKR Capital by 72.8% in the fourth quarter. Mercer Global Advisors Inc. ADV now owns 128,097 shares of the company's stock worth $1,897,000 after buying an additional 53,978 shares during the period. Summit Global Investments increased its position in shares of FS KKR Capital by 28.8% in the fourth quarter. Summit Global Investments now owns 37,399 shares of the company's stock worth $554,000 after acquiring an additional 8,352 shares in the last quarter. Finally, Elliott Investment Management L.P. purchased a new position in shares of FS KKR Capital in the fourth quarter worth approximately $3,922,000. 36.26% of the stock is owned by hedge funds and other institutional investors.

Wall Street Analysts Forecast Growth

Several equities research analysts recently weighed in on the stock. Truist Financial upped their price objective on shares of FS KKR Capital from $11.00 to $12.00 and gave the stock a "hold" rating in a report on Friday. Royal Bank Of Canada reissued a "sector perform" rating and set a $11.00 target price on shares of FS KKR Capital in a research note on Tuesday, May 12th. Wall Street Zen upgraded shares of FS KKR Capital from a "sell" rating to a "hold" rating in a research report on Saturday, August 1st. Zacks Research lowered shares of FS KKR Capital from a "hold" rating to a "strong sell" rating in a research note on Monday, July 13th. Finally, Keefe, Bruyette & Woods decreased their price objective on shares of FS KKR Capital from $15.00 to $11.00 and set a "market perform" rating for the company in a report on Thursday, April 16th. Six analysts have rated the stock with a Hold rating and two have issued a Sell rating to the company's stock. Based on data from MarketBeat.com, FS KKR Capital has an average rating of "Reduce" and a consensus price target of $10.93.

Key Headlines Impacting FS KKR Capital

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

• Positive Sentiment: FSK reported second-quarter adjusted net investment income of $0.43 per share, exceeding the $0.42 consensus estimate, while revenue of $290 million also topped expectations of $286.75 million. Results improved substantially from the prior-year loss of $0.75 per share. FS KKR Capital Q2 Earnings and Revenues Surpass Estimates
• Positive Sentiment: The board declared a third-quarter distribution of $0.44 per share, up 4.8% from $0.42 previously and equivalent to an approximately 14.8% annualized yield. The dividend is payable October 2 to shareholders of record September 16. FS KKR Capital Announces Second Quarter Results and Distribution
• Positive Sentiment: Management expects 8%–9% annualized net investment income for the remainder of 2026 and is advancing share repurchases and portfolio rotation. Debt-to-equity declined to 127% from 138%, moving leverage closer to the company’s target range. FSK Expects 8% to 9% Annualized Net Investment Income
• Positive Sentiment: A Seeking Alpha analysis upgraded FSK to a “Buy,” reflecting a more favorable view of its income outlook, valuation and improving credit trends. FS KKR Time to Get Bullish Again
• Neutral Sentiment: Truist raised its price target from $11 to $12 but maintained a “Hold” rating, indicating limited expected upside at recent trading levels. Benzinga
• Negative Sentiment: Net asset value fell to $18.30 per share from $18.83, and FSK posted a second-quarter GAAP loss of $0.13 per share because of $0.56 per-share realized and unrealized investment losses. Continued portfolio losses and non-accrual assets remain important risks. FS KKR Capital Second Quarter Results

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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