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Annaly Q2 Earnings Surpass Estimates, Book Value Declines Y/Y
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Key Takeaways
NLY posted Q2 EAD of 73 cents per share, up y/y from 68 cents and surpassing the estimate of 72 cents.
Net interest spread rose to 1.47% from 1.24%, and total assets grew 6.7% quarter over quarter.
Book value per share fell to $18.45 from $19.25, while economic leverage held steady at 5.8X.
Annaly Capital Management, Inc. (NLY - Free Report) reported second-quarter 2025 adjusted earnings available for distribution (EAD) per average share of 73 cents, which beat the Zacks Consensus Estimate of 72 cents. The figure increased from 68 cents in the year-ago quarter.
NLY’s average yield on interest-earning assets improved in the reported quarter. However, the company recorded a year-over-year decline in book value per share (BVPS).
Inside Annaly’s Headlines
Net interest income (NII) was $273.2 million in the reported quarter, which missed the Zacks Consensus Estimate by 33.5%. In the prior-year quarter, the company reported a NII of $53.6 million.
At the end of the second quarter, Annaly had $112.1 billion of total assets, rising 6.7% from the prior quarter.
In the reported quarter, the average yield on interest-earning assets (excluding premium amortization adjustment or PAA) was 5.42%, up from the prior-year quarter’s 5.17%. The average economic costs of interest-bearing liabilities were 3.94%, up from 3.90% in the year-ago quarter.
Net interest spread (excluding PAA) of 1.47% in the second quarter increased from 1.24% in the prior-year quarter. Also, the net interest margin (excluding PAA) was 1.71% compared with 1.24% in the second quarter of 2024.
Annaly’s BVPS was $18.45 as of June 30, 2025, down from $19.25 in the prior-year quarter. At the end of the reported quarter, the company’s economic capital ratio was 14.3%, down from 14.4% in the prior-year quarter.
In the second quarter, the weighted average actual constant prepayment rate was 8.7%, up from 7.4% in the year-ago quarter. Economic leverage was 5.8X as of June 30, 2025, unchanged from the year-ago quarter.
Annaly generated an annualized EAD return on average equity of 14.86% in the second quarter, which increased from the prior-year quarter’s 13.36%.
Our Take on NLY
Annaly’s second-quarter results benefited from the rise in average yield and total assets. Its prudent asset selection will continue to drive performance in the upcoming period. However, a decline in book value per share is concerning. Also, achieving solid returns may be challenging due to the growing concerns in financial markets.
Annaly Capital Management Inc Price, Consensus and EPS Surprise
Apollo Commercial Real Estate Finance, Inc. (ARI - Free Report) is expected to report second-quarter 2025 results on July 29.
The Zacks Consensus Estimate for ARI’s quarterly earnings has been unchanged at 26 cents per share over the past seven days. This indicates a decline of 25.7% from the prior-year quarter’s reported figure.
Starwood Property Trust, Inc. (STWD - Free Report) is slated to post second-quarter 2025 results on Aug 7.
The Zacks Consensus Estimate for STWD’s quarterly earnings has been revised downward to 39 cents per share over the past seven days. This indicates a decline of 18.8% from the prior-year quarter’s reported figure.
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Annaly Q2 Earnings Surpass Estimates, Book Value Declines Y/Y
Key Takeaways
Annaly Capital Management, Inc. (NLY - Free Report) reported second-quarter 2025 adjusted earnings available for distribution (EAD) per average share of 73 cents, which beat the Zacks Consensus Estimate of 72 cents. The figure increased from 68 cents in the year-ago quarter.
NLY’s average yield on interest-earning assets improved in the reported quarter. However, the company recorded a year-over-year decline in book value per share (BVPS).
Inside Annaly’s Headlines
Net interest income (NII) was $273.2 million in the reported quarter, which missed the Zacks Consensus Estimate by 33.5%. In the prior-year quarter, the company reported a NII of $53.6 million.
At the end of the second quarter, Annaly had $112.1 billion of total assets, rising 6.7% from the prior quarter.
In the reported quarter, the average yield on interest-earning assets (excluding premium amortization adjustment or PAA) was 5.42%, up from the prior-year quarter’s 5.17%. The average economic costs of interest-bearing liabilities were 3.94%, up from 3.90% in the year-ago quarter.
Net interest spread (excluding PAA) of 1.47% in the second quarter increased from 1.24% in the prior-year quarter. Also, the net interest margin (excluding PAA) was 1.71% compared with 1.24% in the second quarter of 2024.
Annaly’s BVPS was $18.45 as of June 30, 2025, down from $19.25 in the prior-year quarter. At the end of the reported quarter, the company’s economic capital ratio was 14.3%, down from 14.4% in the prior-year quarter.
In the second quarter, the weighted average actual constant prepayment rate was 8.7%, up from 7.4% in the year-ago quarter.
Economic leverage was 5.8X as of June 30, 2025, unchanged from the year-ago quarter.
Annaly generated an annualized EAD return on average equity of 14.86% in the second quarter, which increased from the prior-year quarter’s 13.36%.
Our Take on NLY
Annaly’s second-quarter results benefited from the rise in average yield and total assets. Its prudent asset selection will continue to drive performance in the upcoming period. However, a decline in book value per share is concerning. Also, achieving solid returns may be challenging due to the growing concerns in financial markets.
Annaly Capital Management Inc Price, Consensus and EPS Surprise
Annaly Capital Management Inc price-consensus-eps-surprise-chart | Annaly Capital Management Inc Quote
NLY currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Release Dates of Annaly’s Peers
Apollo Commercial Real Estate Finance, Inc. (ARI - Free Report) is expected to report second-quarter 2025 results on July 29.
The Zacks Consensus Estimate for ARI’s quarterly earnings has been unchanged at 26 cents per share over the past seven days. This indicates a decline of 25.7% from the prior-year quarter’s reported figure.
Starwood Property Trust, Inc. (STWD - Free Report) is slated to post second-quarter 2025 results on Aug 7.
The Zacks Consensus Estimate for STWD’s quarterly earnings has been revised downward to 39 cents per share over the past seven days. This indicates a decline of 18.8% from the prior-year quarter’s reported figure.