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Can Annaly (NLY) Retain Its Beat Streak in Q2 Earnings?
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Annaly Capital Management Inc. (NLY - Free Report) is scheduled to report second-quarter 2024 results on Jul 24, after market close. The company’s results are expected to reflect declines in earnings from the year-ago reported figure, while net interest income (NII) is expected to have increased.
In the last reported quarter, the mortgage real estate investment trust (mREIT) posted earnings available for distribution per share of 64 cents, in line with the Zacks Consensus Estimate. Improvements in the average yield on interest-earning assets supported results. However, the company registered a year-over-year decline in book value per share (BVPS).
Annaly has an impressive earnings surprise history. Its earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 3.04%.
Annaly Capital Management Inc Price and EPS Surprise
Let’s see how things have shaped up prior to the second-quarter earnings announcement.
The mREIT sector witnessed a favorable scenario in the quarter under discussion due to lower volatility in the fixed-income markets. Lower fixed-income volatility is likely to have driven mortgage spreads tighter, increasing NLY’s Investment’s book value per share.
In the second quarter, mortgage rates declined marginally, with the rate on a 30-year fixed mortgage declining to 6.7% in June from 6.8% at the start of April. This is likely to have resulted in a slight rise in mortgage demand. Yet, origination volumes (particularly purchase originations) remained lower than in the prior quarter due to home price appreciation.
Yet, supported by lower mortgage rates, there is a likelihood of a modest improvement in refinancing activities. Amid this, a significant portion of NLY’s MBS holdings is anticipated to have witnessed elevated levels of constant prepayment rate (CPR). This is expected to have positively impacted net premium amortization in the second quarter, thereby supporting growth in interest income and average asset yield.
The consensus estimate for second-quarter NII is pegged at $190.6 million from the quarter-ago reported negative NII of $6.45 million.
The Federal Reserve kept the interest rates steady during the quarter at a 23-year high of 5.25-5.5%. Given the high interest rates, the company is expected to have seen higher funding costs. This is likely to have increased costs of interest-bearing liabilities for NLY in the quarter to be reported.
The company’s activities in the second quarter were inadequate to gain analysts’ confidence. Consequently, the Zacks Consensus Estimate for earnings has remained unchanged at 66 cents. The metric indicates a year-over-year decline of 8.3%.
Earnings Whispers
Our proven model does not show that an earnings beat is likely for NLY this time around. This is because the company does not have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Annaly has an Earnings ESP of 0.00%.
A couple of finance stocks that have the right combination of elements to post an earnings beat in the upcoming releases per our model are Capital One Financial Corporation (COF - Free Report) and Moody's Corporation (MCO - Free Report) .
The Earnings ESP for COF is +1.52% and it carries a Zacks Rank #3 at present. The company is slated to report second-quarter 2024 results on Jul 23.
MCO is scheduled to release second-quarter 2024 earnings on Jul 23. The company, which carries a Zacks Rank #2 (Buy) at present, has an Earnings ESP of +2.80.
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Can Annaly (NLY) Retain Its Beat Streak in Q2 Earnings?
Annaly Capital Management Inc. (NLY - Free Report) is scheduled to report second-quarter 2024 results on Jul 24, after market close. The company’s results are expected to reflect declines in earnings from the year-ago reported figure, while net interest income (NII) is expected to have increased.
In the last reported quarter, the mortgage real estate investment trust (mREIT) posted earnings available for distribution per share of 64 cents, in line with the Zacks Consensus Estimate. Improvements in the average yield on interest-earning assets supported results. However, the company registered a year-over-year decline in book value per share (BVPS).
Annaly has an impressive earnings surprise history. Its earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 3.04%.
Annaly Capital Management Inc Price and EPS Surprise
Annaly Capital Management Inc price-eps-surprise | Annaly Capital Management Inc Quote
Let’s see how things have shaped up prior to the second-quarter earnings announcement.
The mREIT sector witnessed a favorable scenario in the quarter under discussion due to lower volatility in the fixed-income markets. Lower fixed-income volatility is likely to have driven mortgage spreads tighter, increasing NLY’s Investment’s book value per share.
In the second quarter, mortgage rates declined marginally, with the rate on a 30-year fixed mortgage declining to 6.7% in June from 6.8% at the start of April. This is likely to have resulted in a slight rise in mortgage demand. Yet, origination volumes (particularly purchase originations) remained lower than in the prior quarter due to home price appreciation.
Yet, supported by lower mortgage rates, there is a likelihood of a modest improvement in refinancing activities. Amid this, a significant portion of NLY’s MBS holdings is anticipated to have witnessed elevated levels of constant prepayment rate (CPR). This is expected to have positively impacted net premium amortization in the second quarter, thereby supporting growth in interest income and average asset yield.
The consensus estimate for second-quarter NII is pegged at $190.6 million from the quarter-ago reported negative NII of $6.45 million.
The Federal Reserve kept the interest rates steady during the quarter at a 23-year high of 5.25-5.5%. Given the high interest rates, the company is expected to have seen higher funding costs. This is likely to have increased costs of interest-bearing liabilities for NLY in the quarter to be reported.
The company’s activities in the second quarter were inadequate to gain analysts’ confidence. Consequently, the Zacks Consensus Estimate for earnings has remained unchanged at 66 cents. The metric indicates a year-over-year decline of 8.3%.
Earnings Whispers
Our proven model does not show that an earnings beat is likely for NLY this time around. This is because the company does not have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Annaly has an Earnings ESP of 0.00%.
Zacks Rank: Annaly currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks Worth a Look
A couple of finance stocks that have the right combination of elements to post an earnings beat in the upcoming releases per our model are Capital One Financial Corporation (COF - Free Report) and Moody's Corporation (MCO - Free Report) .
The Earnings ESP for COF is +1.52% and it carries a Zacks Rank #3 at present. The company is slated to report second-quarter 2024 results on Jul 23.
MCO is scheduled to release second-quarter 2024 earnings on Jul 23. The company, which carries a Zacks Rank #2 (Buy) at present, has an Earnings ESP of +2.80.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.