FS KKR Capital (NYSE:FSK) Releases Quarterly Earnings Results, Misses Estimates By $0.03 EPS

FS KKR Capital (NYSE:FSK) released its quarterly earnings results on Monday. The company reported $0.41 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.44 by ($0.03), FiscalAI reports. FS KKR Capital had a net margin of 0.72% and a return on equity of 5.21%. The business had revenue of $304.00 million for the quarter, compared to the consensus estimate of $316.81 million. During the same period in the previous year, the business posted $0.65 EPS. FS KKR Capital’s revenue was down 24.0% on a year-over-year basis.

Here are the key takeaways from FS KKR Capital’s conference call:

• FSK and KKR announced a coordinated support package including a $150M fixed‑price tender at $11, a $150M convertible perpetual preferred (5% cash / 7% PIK, conversion tied to the $18.83 NAV), a $300M share repurchase authorization, and a 4‑quarter waiver of 50% of KKR’s subordinated income incentive fee to help stabilize the stock and distributions.
• FSK reported a 9.9% NAV decline (ending NAV $18.83) and GAAP net investment income of $0.42 per share; name‑specific credit events (e.g., Medallia marked to $0.54, ATX, PRG, Affordable Care) and higher non‑accruals (8.1% cost / 4.2% fair value) drove the weakness.
• Management plans to shrink and de‑risk the balance sheet — reducing new originations, focusing on first‑lien/asset‑based finance, targeting deleveraging while executing buybacks, and expecting >$500M net repayments in Q2 with pro‑forma liquidity of ~$2.3B.
• Portfolio backdrop: ~60% first‑lien (≈69% look‑through including JV), senior secured ~64–73%, software & services ~16% across 52 issuers with an internal AI‑risk review showing ~86% of the portfolio as low AI risk and median LTV ~38%, which management says supports credit resilience but could lengthen hold periods.

FS KKR Capital Trading Down 0.9%

FSK opened at $10.74 on Tuesday. The company has a fifty day moving average price of $10.60 and a two-hundred day moving average price of $13.21. FS KKR Capital has a 1-year low of $9.72 and a 1-year high of $22.68. The company has a market cap of $3.01 billion, a P/E ratio of 358.10 and a beta of 0.85. The company has a current ratio of 3.05, a quick ratio of 3.05 and a debt-to-equity ratio of 1.31.

FS KKR Capital Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Thursday, July 2nd. Shareholders of record on Wednesday, June 17th will be paid a $0.42 dividend. This represents a $1.68 annualized dividend and a yield of 15.6%. The ex-dividend date of this dividend is Wednesday, June 17th. FS KKR Capital’s payout ratio is 6,000.00%.

Key Headlines Impacting FS KKR Capital

Here are the key news stories impacting FS KKR Capital this week:

• Positive Sentiment: FS KKR Capital announced a second-quarter 2026 distribution of $0.42 per share, and the company said KKR Alternative Assets plans a $150 million convertible preferred equity commitment, which could support liquidity and capital structure flexibility.
• Neutral Sentiment: Investors are also parsing the Q1 2026 earnings call transcript and the company’s “strategic value enhancement actions,” which may provide more detail on management’s response to the recent weakness.
• Negative Sentiment: FS KKR Capital missed Q1 expectations, reporting earnings of $0.41 per share versus $0.44 expected, while revenue of $304.0 million also came in below estimates and fell 24% from a year earlier.
• Negative Sentiment: JPMorgan-led lenders reportedly reduced FSK’s credit facility by about $648 million, or 14%, and raised borrowing costs, signaling tighter financing conditions as losses deepen.
• Negative Sentiment: Several law firms announced or reminded investors about securities class-action lawsuits tied to FS KKR Capital, adding legal uncertainty and potential settlement risk.

Insider Activity

In related news, insider Daniel Pietrzak acquired 5,000 shares of the business’s stock in a transaction dated Friday, February 27th. The shares were bought at an average price of $11.25 per share, with a total value of $56,250.00. Following the transaction, the insider directly owned 64,800 shares of the company’s stock, valued at $729,000. This trade represents a 8.36% increase in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. 0.25% of the stock is owned by company insiders.

Hedge Funds Weigh In On FS KKR Capital

Institutional investors and hedge funds have recently made changes to their positions in the stock. Jessup Wealth Management Inc bought a new position in shares of FS KKR Capital during the 4th quarter worth about $26,000. Smartleaf Asset Management LLC boosted its position in shares of FS KKR Capital by 201.2% during the 4th quarter. Smartleaf Asset Management LLC now owns 2,678 shares of the company’s stock worth $40,000 after purchasing an additional 1,789 shares in the last quarter. Knott David M Jr bought a new position in shares of FS KKR Capital during the 4th quarter worth about $43,000. Strive Financial Group LLC bought a new position in shares of FS KKR Capital during the 4th quarter worth about $50,000. Finally, Advocate Investing Services LLC bought a new position in shares of FS KKR Capital during the 4th quarter worth about $59,000. Institutional investors own 36.26% of the company’s stock.

Wall Street Analyst Weigh In

Several equities research analysts have recently weighed in on FSK shares. Wells Fargo & Company decreased their price objective on shares of FS KKR Capital from $15.00 to $11.00 and set an “equal weight” rating for the company in a research report on Friday, February 27th. JPMorgan Chase & Co. decreased their price objective on shares of FS KKR Capital from $13.00 to $9.50 and set a “neutral” rating for the company in a research report on Friday, March 13th. Keefe, Bruyette & Woods decreased their price objective on shares of FS KKR Capital from $15.00 to $11.00 and set a “market perform” rating for the company in a research report on Thursday, April 16th. B. Riley Financial decreased their price objective on shares of FS KKR Capital from $17.50 to $11.00 and set a “neutral” rating for the company in a research report on Tuesday, March 3rd. Finally, Royal Bank Of Canada decreased their price objective on shares of FS KKR Capital from $15.00 to $13.00 and set a “sector perform” rating for the company in a research report on Monday, April 6th. Seven research analysts have rated the stock with a Hold rating and one has issued a Sell rating to the company’s stock. According to MarketBeat, FS KKR Capital presently has an average rating of “Reduce” and a consensus target price of $11.08.

About FS KKR Capital

FS KKR Capital Corp (NYSE:FSK) is a closed-end, externally managed business development company that primarily invests in private middle-market U.S. companies. The firm seeks to generate current income and capital appreciation by structuring investments in floating-rate senior secured loans, unitranche financings, second lien debt and mezzanine instruments. As a business development company, FSK provides financing solutions designed to support growth initiatives, acquisitions, leveraged buyouts and recapitalizations for privately held enterprises.

Established in 2018 through a strategic partnership between FS Investment Corporation and KKR Credit Advisors, a division of global investment firm KKR & Co Inc, FSK combines the credit underwriting capabilities of KKR’s global platform with FS’s expertise in private credit markets.