KKR Financial - KFN BLOW UP AFTERHOURS

KKR Financial Profit Up 37% On Gains, Lower Interest Expense


DOW JONES NEWSWIRES

KKR Financial Holdings LLC's (KFN) third-quarter income grew 37% on a drop in interest expense and a gain on investments. The results widely beat expectations.
The company, which invests in corporate debt, has seen its stock drop about 80% since it listed in 2005, losing billions of dollars in market value amid the drop in the debt markets. It suspended its dividend payment last year amid a liquidity crunch but has recently improved its balance sheet.
KKR Financial is a unit of private-equity firm Kohlberg Kravis Roberts & Co., which, although it has benefited from the market rebound this year, still finds itself struggling with soured takeover bets, damaged lending markets and a skittish investor base.
The company posted income of $67.2 million, or 42 cents a share, up from $49 million, or 32 cents a share, a year earlier. Revenue fell 40% to $135.2 million.
The latest results included $21.2 million in net realized and unrealized gains on investments, while the prior year's results included $28.3 million in losses from investments.
In March, the company forecast earnings of about 30 cents a share for each quarter this year. Analysts surveyed by Thomson Reuters recently expected 15 cents.
Shares of KKR Financial were up 3.9% to $5.38 in after-hours trading.