10-Q · May 11, 2026
FS KKR Capital Corp. (FSK) reported disappointing Q1 2026 results with revenue of $400 million, missing estimates by $15 million, and a significant EPS loss of $1.57 compared to expectations of $0.44. Management…
Earnings analysis · 10-Q
FSK earnings analysis
Filed November 5, 2026 · Our reading of the company's report
The latest report
The filing does not provide current-quarter revenue, EPS, margin, cash-flow, or segment results, limiting assessment of operating performance versus the prior period and prior year. NAV was broadly stable at $18.28 per…
Read full summary
The filing does not provide current-quarter revenue, EPS, margin, cash-flow, or segment results, limiting assessment of operating performance versus the prior period and prior year. NAV was broadly stable at $18.28 per share, while the company repurchased 6,155,872 shares at an average $11.24, below NAV. The investment portfolio remains materially exposed to interest rates, with 60.1% of investments paying variable rates and modeled net-interest-income sensitivity of 15.5% for a 250-basis-point rate decline. Newly emphasized unitranche exposure and Adviser litigation/regulatory risks are important negatives.
What stood out
-
NAV was broadly stable sequentially
Net asset value per share was $18.28 at September 30, 2026, compared with $18.30 at June 30, 2026, a modest $0.02 sequential decline.
-
Share repurchases continued below NAV
The company repurchased 6,155,872 shares during the quarter at an average price of $11.24, leaving $227 million available under the authorization at September 30, 2026.
-
Portfolio remains positioned for rate upside
As of September 30, 2026, 60.1% of portfolio investments at fair value paid variable rates, while a 50-basis-point rate increase was modeled to increase net interest income by $13 million, or 3.0%, over 12 months.
-
No material control weaknesses reported
Disclosure controls were judged effective, and management reported no change in internal control over financial reporting that materially affected, or was reasonably likely to materially affect, the company during the quarter.
What to watch
-
New unitranche credit-risk exposure
The filing adds unitranche-loan risk, including potential priority disadvantages for last-out lenders and lump-sum maturity exposure. The filing states these investments may involve greater loss risk than traditional first-lien loans.
-
Net interest income remains rate-sensitive
A 250-basis-point decline in rates is modeled to reduce net interest income by $68 million, or 15.5%, over 12 months. Although 60.1% of investments pay variable rates, interest-rate floors may delay the benefit from higher rates.
-
Adviser litigation and regulatory risk
The filing highlights litigation and regulatory risks involving the Adviser and affiliates, including a DOJ antitrust matter involving KKR that was subject to a proposed $250.0 million payment, contingent on judicial approval of the proposed final judgment.
Management's outlook
No quantitative revenue or EPS guidance was provided in the filing. Management states that long-term investments are expected to be financed primarily with equity and debt.
Earlier filings 1
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.