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Why Is Annaly Capital (NLY) Down 1.4% Since its Last Earnings Report?

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A month has gone by since the last earnings report for Annaly Capital Management Inc (NLY - Free Report) . Shares have lost about 1.4% in that time frame.

Will the recent negative trend continue leading up to its next earnings release, or is NLY due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Annaly Capital Q4 Earnings Beat Estimates, NII Grows

Annaly Capital reported fourth-quarter 2017 adjusted core earnings of 31 cents per share, beating the Zacks Consensus Estimate by a penny. Also, earnings compared favorably with the prior-quarter figure of 30 cents.

Results highlight an increase in NII in the fourth quarter, which totaled $426.7 million, representing sequential growth of 20.7%.

Quarter in Detail

In the reported quarter, average yield on interest-earning assets, excluding PAA, was 3.02%, up from 2.97% reported in the previous quarter.

Net interest rate spread (excluding PAA) of 1.19% for the fourth quarter inched up from 1.15% reported in the prior quarter. Net interest margin (excluding PAA) came in at 1.51% compared with 1.47% recorded in the prior quarter.

The company’s investment at fair value of Agency mortgage-backed securities was $90.6 billion as of Dec 31, 2017, up from $85.9 billion as of Sep 30, 2017.

Annaly’s book value per share came in at $11.34 as of Dec 31, 2017, compared with $11.42 as of Sep 30, 2017. At the end of the fourth quarter, the company’s capital ratio was 12.9%, up from 12.3% at the end of the previous quarter.

Leverage was 5:7:1 as of Dec 31, 2017, compared with 5:4:1 as of Sep 30, 2017. The company offered an annualized core return on average equity of 10.67% in the reported quarter, up from 10.57% in the prior quarter.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter.

Annaly Capital Management Inc Price and Consensus


VGM Scores

At this time, NLY has a subpar Growth Score of D, though it is lagging a bit on the momentum front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate investors will probably be better served looking elsewhere.


Estimates have been trending upward for the stock and the magnitude of this revision looks promising. Notably, NLY has a Zacks Rank #3 (hold). We expect an in-line return from the stock in the next few months.

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