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FS KKR Capital (FSK) Q2 Earnings Lag Estimates, Costs Down

Zacks Equity Research
·3 min read

FS KKR Capital Corp.’s FSK second-quarter 2020 net investment income of 62 cents per share missed the Zacks Consensus Estimate by a penny. Also, the bottom line was 19.5% below the year-ago quarter figure.

The results were hurt by fall in total investment income. However, lower expenses and decent portfolio activity during the quarter were tailwinds.

Net investment income came in at $77 million, down from $101 million in the prior-year quarter.

Total Investment Income & Expenses Decline

Total investment income was $150 million, down 24.6% from the year-ago quarter. The fall was mainly due to lower interest income. Also, the figure lagged the Zacks Consensus Estimate of $157.2 million.

Total operating expenses declined 25.5% year over year to $73 million. Lower management fees and the absence of subordinated income incentive fees were the main reasons for the fall.

The fair value of FS KKR Capital’s total investment portfolio was $6.6 billion as of Jun 30, 2020.

As of Jun 30, 2020, FS KKR Capital’s net asset value was $23.37 per share compared with $31.51 on Jun 30, 2019.

The company had $7 billion in total assets and $2.9 billion in total stockholders’ equity as of Jun 30, 2020.

Major Development

During the quarter, FS KKR Capital completed a 4 to 1 reverse split of its shares of common stock.

Our Viewpoint

Decent origination volumes are expected to support FS KKR Capital’s profitability. However, a tough operating backdrop is a matter of concern.

FS KKR Capital Corp. Price, Consensus and EPS Surprise

FS KKR Capital Corp. Price, Consensus and EPS Surprise
FS KKR Capital Corp. Price, Consensus and EPS Surprise

FS KKR Capital Corp. price-consensus-eps-surprise-chart | FS KKR Capital Corp. Quote

Currently, FS KKR Capital carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Finance Stocks

Hercules Capital Inc.’s HTGC second-quarter 2020 net investment income of 32 cents per share lagged the Zacks Consensus Estimate by a penny. The bottom line also declined 11.1% from the year-ago reported figure.

Medley Capital Corporation’s MCC third-quarter fiscal 2020 (ended Jun 30) net investment loss was 26 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of $1.00. In the prior-year quarter, the company reported net investment loss of $1.40.

TriplePoint Venture Growth BDC Corp.’s TPVG second-quarter 2020 net investment income of 38 cents per share surpassed the Zacks Consensus Estimate of 36 cents. However, the bottom line declined 7% from the year-ago quarter.

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Hercules Capital, Inc. (HTGC) : Free Stock Analysis Report
 
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