KKR's Distributable Income Rises, Matching Expectations

KKR after-tax distributable earnings rise 11% in the quarter. But the private-equity giant posted a net loss as its fund values suffered from coronavirus-inspired market turmoil.
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Shares of KKR  (KKR) - Get Report rose in premarket trading after the private-equity titan’s distributable earnings increased in the first quarter, matching analysts’ forecasts.

Increasing asset sales and management fees, garnered before the coronavirus pandemic raged, boosted that metric.

After-tax distributable earnings climbed 11% to $355.3 million, or 42 cents a share, in the quarter from $314.1 million a year ago. That per-share figure equaled analysts’ consensus estimate, as tallied Refinitiv.

KKR posted a net loss of $1.28 billion, or $2.31 a share, in the quarter, swinging from profit of $701 million, or $1.27 a share, a year earlier.

The company and its competitors had to slash the value of many of their funds as equity markets slumped around the world in late February and in March as the pandemic picked up steam.

Still, KKR has $58 billion of uncalled capital, known as dry powder, that it can put to work, investing at what may be bargain prices in light of the pandemic.

The company said it plans to pay a dividend of 13.5 cents for the first quarter, up 8% from 12.5 cents in the fourth quarter and the first quarter of 2019.

“Since February, we have seen more uncertainty and volatility than at any time since the financial crisis,” KKR’s co-CEOs Henry Kravis and George Roberts said in a statement.

“KKR navigated the quarter well and our results bear testament to the strength of our business model," they added.

KKR shares stood at $24.65 in premarket trading, up 0.61%. The stock has dropped 26% in the last three months.