FS KKR Capital Corp. (NYSE:FSK) shares fell more than 3% in premarket trading on Monday after the business development company reported first-quarter results that came in below analyst forecasts.
The company posted adjusted net investment income of $0.41 per share, missing the consensus estimate of $0.44 per share.
Revenue Declines and Net Asset Value Weakens
Quarterly revenue totaled $304 million, falling short of analyst expectations of $316.78 million and declining 24% from $400 million recorded in the first quarter of 2025.
FS KKR Capital’s net asset value dropped to $18.83 per share from $20.89 at the end of December 2025.
The company said the decline was driven by underperforming investments from prior quarters, additional non-accrual assets and widening market credit spreads across parts of its portfolio.
During the quarter, FSK recorded a combined realized and unrealized net loss of $2.00 per share.
Company Announces Capital Support Measures
In response to the weaker performance, the company unveiled several initiatives aimed at strengthening shareholder returns and supporting the balance sheet.
A subsidiary of KKR agreed to invest $150 million in cumulative convertible perpetual preferred stock carrying a 5% annual cash dividend.
KKR also plans to launch a $150 million tender offer for FSK common shares at $11.00 per share.
In addition, the company’s board authorized a new $300 million share repurchase program.
KKR further agreed to waive 50% of the total subordinated income incentive fee for four consecutive quarters beginning in the second quarter of 2026.
Management Addresses Portfolio Challenges
“Our first quarter decline in net asset value was driven by investments which have impacted prior quarters, certain new non-accrual assets, and the impact of market-driven spread widening in certain segments of our portfolio,” said Chief Executive Officer and Chairman Michael C. Forman and President and Chief Investment Officer Daniel R. Pietrzak.
Quarterly Dividend Declared
FS KKR Capital’s board declared a second-quarter 2026 distribution of $0.42 per share.
The dividend is scheduled to be paid on July 2, 2026, to shareholders of record as of June 17, 2026.