Why did KREF's Q1 2024 EPS fall short?

The EPS of KKR Real Estate Finance (KREF) for Q1 2024 was -$0.13, which fell short of expectations. This shortfall can be attributed to several key factors:

1. **Loan Loss Provisions and Default**: KREF's Q1 2024 financials were impacted by a significant $59 million loss tied to a Philadelphia office loan, leading to a distributable loss of about $26 million, or a loss of 37 cents-per-share. This substantial loan loss provision contributed significantly to the negative EPS.
2. **Interest Income and Other Income Shortfall**: The company's total other income was $4.17 million, which fell short of the two-analyst average estimate of $4.58 million. This shortfall, along with a lower total net interest income, reflects operational inefficiencies and challenges in generating expected income from its investment activities.

In summary, KREF's Q1 2024 EPS fell short primarily due to loan loss provisions and defaults, and shortfall in interest and other income. These factors combined to negatively impact the company's profitability and resulted in a lower-than-expected EPS.