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FS KKR Capital (FSK) Q2 Earnings Top Estimates, Costs Rise Y/Y

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FS KKR Capital Corp.’s FSK second-quarter 2021 adjusted net investment income (NII) per share of 74 cents surpassed the Zacks Consensus Estimate of 61 cents. In the prior-year quarter, the company reported earnings of 62 cents. The reported quarter’s results exclude accretion resulting from the merger with FS KKR Capital Corp. II.

Results were aided by a rise in total investment income. Also, portfolio activity was decent in the quarter. However, higher expenses hurt results to some extent.

NII (GAAP basis) was $116 million, up 50.6% from the prior-year quarter.

Total Investment Income Improves, Expenses Rise

Total investment income was $206 million, up 37.3% year over year. The top line surpassed the Zacks Consensus Estimate of $146.8 million.

Total operating expenses increased 23.3% from the prior-year quarter to $90 million. All cost components except for administrative services expenses, and accounting and administrative fees witnessed a rise.

Total Portfolio Value & Balance Sheet Decent

The fair value of FS KKR Capital’s total investment portfolio was $14.7 billion as of Jun 30, 2021.

As of Jun 30, 2021, the company’s net asset value was $26.84 per share compared with $25.02 as of Dec 31, 2020.

The company had $15.7 billion in total assets and $7.7 billion in total stockholders’ equity at the end of the second quarter.

Our Take

Decent origination volumes are expected to support FS KKR Capital’s profitability. However, a tough operating backdrop poses a 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 #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Finance Companies

Credit Acceptance Corporation’s CACC second-quarter 2021 earnings of $17.18 per share comfortably outpaced the Zacks Consensus Estimate of $10.08. The bottom line reflects a substantial improvement from $5.40 earned in the prior-year quarter. These figures include certain non-recurring items.

Ares Capital Corporation’s ARCC second-quarter 2021 core earnings of 53 cents per share surpassed the Zacks Consensus Estimate of 43 cents. Moreover, the bottom line reflects a rise of 35.9% from the prior-year quarter’s reported number.

Hercules Capital Inc.’s HTGC second-quarter 2021 net investment income of 32 cents per share was in line with the Zacks Consensus Estimate. The figure indicates no change from the year-ago quarter’s reported number.


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Ares Capital Corporation (ARCC) : Free Stock Analysis Report

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

Credit Acceptance Corporation (CACC) : Free Stock Analysis Report

FS KKR Capital Corp. (FSK) : Free Stock Analysis Report

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