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FS KKR Capital (FSK) Q3 Earnings Beat Estimates, Costs Up
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FS KKR Capital Corp.’s (FSK - Free Report) third-quarter 2023 adjusted net investment income (NII) per share of 80 cents surpassed the Zacks Consensus Estimate of 78 cents. The bottom line also grew 2.6% year over year.
A solid rise in total investment income aided the results. Also, portfolio activity was decent in the quarter. However, higher expenses hurt FSK’s results to some extent.
NII (GAAP basis) was $234 million, up 8.3% from the prior-year quarter.
Total Investment Income & Expenses Rise
Total investment income was $465 million, up 13.1% from the year-ago quarter. The top line outpaced the Zacks Consensus Estimate of $455.7 million.
Total operating expenses increased 10.5% to $221 million. The rise was mainly due to higher interest expenses. Moreover, the company recorded a subordinated income incentive fee of $47 million in the reported quarter.
Total Portfolio Value & Balance Sheet Decent
The fair value of FS KKR Capital’s total investment portfolio was $14.7 billion as of Sep 30, 2023.
As of Sep 30, 2023, the company’s net asset value was $24.89 per share, the same as of Dec 31, 2022.
The company had $15.4 billion in total assets and $7 billion in total stockholders’ equity at the end of the third quarter. As of Sep 30, 2023, 59% of FSK’s $8.05 billion of total debt was unsecured and 41% was secured.
Our Take
Decent origination volumes are expected to support FS KKR Capital’s profitability. However, a tough operating backdrop remains a headwind.
FS KKR Capital Corp. Price, Consensus and EPS Surprise
Hercules Capital Inc.’s (HTGC - Free Report) third-quarter 2023 net investment income of 52 cents per share outpaced the Zacks Consensus Estimate of 50 cents. The bottom line reflects a rise of 53.6% from the year-ago quarter.
Results were primarily aided by an increase in the total investment income. Also, the balance sheet position remained strong and new commitments were robust. However, higher expenses hurt HTGC’s results to some extent.
Ares Capital Corporation’s (ARCC - Free Report) third-quarter 2023 core earnings of 59 cents per share surpassed the Zacks Consensus Estimate by a penny. The bottom line reflected a rise of 18% from the prior-year quarter.
Results were primarily aided by an improvement in the total investment income. Also, the company’s portfolio activity was robust in the quarter. However, an increase in expenses hurt ARCC’s results to some extent.
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FS KKR Capital (FSK) Q3 Earnings Beat Estimates, Costs Up
FS KKR Capital Corp.’s (FSK - Free Report) third-quarter 2023 adjusted net investment income (NII) per share of 80 cents surpassed the Zacks Consensus Estimate of 78 cents. The bottom line also grew 2.6% year over year.
A solid rise in total investment income aided the results. Also, portfolio activity was decent in the quarter. However, higher expenses hurt FSK’s results to some extent.
NII (GAAP basis) was $234 million, up 8.3% from the prior-year quarter.
Total Investment Income & Expenses Rise
Total investment income was $465 million, up 13.1% from the year-ago quarter. The top line outpaced the Zacks Consensus Estimate of $455.7 million.
Total operating expenses increased 10.5% to $221 million. The rise was mainly due to higher interest expenses. Moreover, the company recorded a subordinated income incentive fee of $47 million in the reported quarter.
Total Portfolio Value & Balance Sheet Decent
The fair value of FS KKR Capital’s total investment portfolio was $14.7 billion as of Sep 30, 2023.
As of Sep 30, 2023, the company’s net asset value was $24.89 per share, the same as of Dec 31, 2022.
The company had $15.4 billion in total assets and $7 billion in total stockholders’ equity at the end of the third quarter. As of Sep 30, 2023, 59% of FSK’s $8.05 billion of total debt was unsecured and 41% was secured.
Our Take
Decent origination volumes are expected to support FS KKR Capital’s profitability. However, a tough operating backdrop remains a headwind.
FS KKR Capital Corp. Price, Consensus and EPS Surprise
FS KKR Capital Corp. price-consensus-eps-surprise-chart | FS KKR Capital Corp. Quote
Currently, FSK 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
Hercules Capital Inc.’s (HTGC - Free Report) third-quarter 2023 net investment income of 52 cents per share outpaced the Zacks Consensus Estimate of 50 cents. The bottom line reflects a rise of 53.6% from the year-ago quarter.
Results were primarily aided by an increase in the total investment income. Also, the balance sheet position remained strong and new commitments were robust. However, higher expenses hurt HTGC’s results to some extent.
Ares Capital Corporation’s (ARCC - Free Report) third-quarter 2023 core earnings of 59 cents per share surpassed the Zacks Consensus Estimate by a penny. The bottom line reflected a rise of 18% from the prior-year quarter.
Results were primarily aided by an improvement in the total investment income. Also, the company’s portfolio activity was robust in the quarter. However, an increase in expenses hurt ARCC’s results to some extent.