FS KKR Capital (FSK) Q3 Earnings Top Estimates as Costs Fall
FS KKR Capital Corp.’s FSK third-quarter 2020 net investment income of 63 cents per share beat the Zacks Consensus Estimate of 61 cents. However, the bottom line was 29.2% below the year-ago quarter figure.
Results were hurt by fall in total investment income. However, lower expenses and decent portfolio activity during the quarter were tailwinds.
Net investment income was $78 million, down 32.2% from the prior-year quarter.
Total Investment Income & Expenses Decline
Total investment income was $147 million, down 26.1% year over year. The fall was mainly due to lower interest income and fee income. Also, the figure lagged the Zacks Consensus Estimate of $147.3 million.
Total operating expenses fell 17.9% year over year to $69 million. Lower management fees and the absence of subordinated income incentive fees were the main reasons for the decline.
Total Portfolio Value & Balance Sheet
The fair value of FS KKR Capital’s total investment portfolio was $6.65 billion as of Sep 30, 2020.
As of Sep 30, 2020, FS KKR Capital’s net asset value was $24.46 per share compared with $31.43 on Sep 30, 2019.
The company had $7.13 billion in total assets and $3.03 billion in total stockholders’ equity as of Sep 30, 2020.
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-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 third-quarter 2020 net investment income of 34 cents per share surpassed the Zacks Consensus Estimate of 32 cents. However, the bottom line declined 8.1% from the year-ago reported figure.
Ares Capital Corporation’s ARCC third-quarter 2020 core earnings of 39 cents per share beat the Zacks Consensus Estimate by a penny. However, the bottom line declined 18.8% year over year.
TriplePoint Venture Growth BDC Corp.’s TPVG third-quarter 2020 net investment income of 40 cents per share outpaced the Zacks Consensus Estimate of 36 cents. Also, the bottom line improved 38% from the year-ago quarter.
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