Annaly Capital Management ((NLY)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Annaly Capital Management’s recent earnings call conveyed a generally positive sentiment, highlighting strong economic returns and successful capital raises. The company demonstrated resilience in its Agency and Residential Credit portfolios, though challenges were noted due to labor market weaknesses and higher interest rates.
Record Economic Return
Annaly Capital Management reported an impressive economic return of 8.1% for the third quarter of 2025 and 11.5% year-to-date. This marks the eighth consecutive quarter of positive economic returns, showcasing the company’s consistent financial performance.
Successful Capital Raise
In the third quarter, Annaly successfully raised $1.1 billion in accretive equity, including $800 million through an ATM program. Notably, the company reopened the mortgage REIT preferred market with the first preferred issuance since 2019, indicating strong investor confidence.
Strong Agency and Residential Credit Performance
The Agency portfolio saw a 10% growth quarter-over-quarter, reaching over $87 billion in market value, driven by significant investments in Agency MBS. The Residential Credit portfolio also expanded to $6.9 billion, supported by record securitization and loan purchases.
Dividend Coverage
Annaly’s earnings available for distribution (EAD) per share stood at $0.73, exceeding the dividend per share for the quarter. This demonstrates the company’s ability to cover its dividend payouts comfortably.
Labor Market Weakness
The earnings call highlighted concerns about the labor market, which has shown signs of weakness with hiring slowing to 30,000 jobs per month over the past three months. This raises potential downside risks to employment.
Higher Interest Rate Environment
Annaly faced challenges from a higher interest rate environment, as prepayment speeds in certain portfolios were slower than anticipated. This impacted some of the company’s investment strategies, reflecting the broader economic conditions.
Forward-Looking Guidance
Annaly Capital Management’s guidance for the remainder of the year remains optimistic, with expectations of continued robust performance. The company anticipates further growth in its agency portfolio and maintains a diversified housing finance strategy. With declining macro volatility and expected Fed rate cuts, Annaly is well-positioned to navigate the evolving economic landscape.
In summary, Annaly Capital Management’s earnings call painted a picture of resilience and strategic growth, despite facing challenges from the labor market and interest rate environment. The company’s strong economic returns, successful capital raises, and robust portfolio performances underscore its solid position in the financial market.