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What's in the Cards for FS KKR Capital (FSK) in Q4 Earnings?

Zacks Equity Research

FS KKR Capital Corp. FSK is scheduled to announce fourth-quarter and 2018 results on Feb 27, after the market closes. Its quarterly revenues and earnings are projected to decline year over year.

In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results benefited from a decline in operating expenses, partly offset by lower investment income.

The company has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three and matched in one of the trailing four quarters, the average beat being 10.2%.

However, activities of the company during the fourth quarter were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for earnings of 18 cents has remained unchanged over the past 30 days. Also, the figure reflects a year-over-year decline of 18.2%.

Further, the Zacks Consensus Estimate for sales of $98.5 million reflects a decline of 11.1% on a year-over-year basis.

Before we take a look at what our quantitative model predicts for the to-be-reported quarter, let’s check the factors that are likely to impact the quarter’s results.

Factors to Impact Q4 Results

Given the expectation of higher prepayment activity during the fourth quarter, total investment income is likely to improve slightly. Moreover, investment income is expected to be positively impacted by the recent increase in LIBOR rates.

However, as FS KKR Capital continues to invest in the venture growth stage companies, operating expenses are likely to remain elevated.

Earnings Whispers

According to our quantitative model, it cannot be conclusively predicted whether FS KKR Capital will be able to beat the Zacks Consensus Estimate this time. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: FS KKR Capital has an Earnings ESP of 0.00%.

Zacks Rank: The company currently carries a Zacks Rank #3. While this increases the predictive power of ESP, we also need a positive ESP to be confident of an earnings beat.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Release Dates of Other Stocks

While Canadian Imperial Bank of Commerce CM and The Toronto-Dominion Bank TD are slated to report results on Feb 28, Garrison Capital Inc. GARS is scheduled to report results on Mar 5.

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Toronto Dominion Bank (The) (TD) : Free Stock Analysis Report
 
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FS Investment Corporation (FSK) : Free Stock Analysis Report
 
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