Annaly Capital Management (NLY) beats first-quarter earnings and revenue estimates

AFinally Capital Management (NLY) posted quarterly earnings of $0.28 per share, beating Zacks consensus estimate of $0.23 per share. That compares to earnings of $0.29 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents a profit surprise of 21.74%. A quarter ago, this real estate investment trust was expected to post a profit of $0.26 per share when it actually produced a profit of $0.28, delivering a surprise of 7.69 %.

In the past four quarters, the company has exceeded consensus EPS estimates four times.

Annaly, which is part of the Zacks REIT and Equity Trust segment, posted revenue of $580.93 million for the three months ended March 2022, beating Zacks’ consensus estimate by 70.36%. That compares to revenues of $687.41 million a year ago. The company has exceeded consensus revenue estimates twice in the past four quarters.

The sustainability of the immediate stock price movement based on recently released numbers and future earnings forecasts will primarily depend on management’s comments on the earnings call.

Annaly shares have lost around 19.1% since the start of the year compared to a decline of -12.4% for the S&P 500.

What’s next for Annaly?

Although Annaly has underperformed the market so far this year, the question on investors’ minds is: what’s next for the stock?

There are no easy answers to this key question, but one reliable metric that can help investors answer it is the company’s earnings outlook. This includes not only current consensus earnings expectations for the upcoming quarter(s), but also how those expectations have changed recently.

Empirical research shows a strong correlation between short-term stock movements and trends in earnings estimate revisions. Investors can track these revisions on their own or rely on a proven scoring tool like Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Before this publication of the results, the trend of revisions of the estimates for Annaly is mixed. While the magnitude and direction of estimate revisions may change following the release of the company’s earnings report, the current situation translates into a No. 3 (hold) Zacks ranking for the stock. Thus, the shares should move in line with the market in the near future. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how the estimates for the next few quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.23 on $353 million in revenue for the upcoming quarter and $0.94 on $1.43 billion in revenue for the current fiscal year.

Investors should be aware that the outlook for the sector can also have a significant impact on stock performance. In terms of Zacks industry rankings, REIT and Equity Trust are currently in the bottom 31% of Zacks more than 250 industries. Our research shows that the top 50% of industries ranked by Zacks outperform the bottom 50% by a factor of more than 2 to 1.

Granite Point Mortgage Trust (GPMT), another stock in the same sector, has yet to report results for the quarter ending March 2022.

This real estate investment trust is expected to post quarterly earnings of $0.03 per share in its next report, representing a year-over-year change of -92.1%. The consensus EPS estimate for the quarter remained unchanged for the past 30 days.

Granite Point Mortgage Trust revenue is expected to be $21.9 million, down 21.1% from the prior year quarter.

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