Abstract

Annaly Capital Management will report quarterly results on October 21, 2025, Post Market; our preview highlights revenue, margin, and EPS trends alongside consensus forecasts and segment dynamics.

Market Forecast

The market anticipates Annaly Capital Management to deliver revenue of 1.66 billion US dollars this quarter, implying 27.50% year-over-year growth; consensus looks for adjusted EPS of 0.75 with a 7.07% year-over-year increase and EBIT of 554.67 million US dollars, up 24.62%. Forecasts imply margin resilience, with investors focusing on gross margin near recent levels and net profit margin remaining elevated; management’s mix still emphasizes Agency MBS with disciplined risk management. Agency remains the business highlight with expected stability and attractive carry, while Mortgage Servicing Rights is seen as a balancing tool; Agency is the most promising revenue engine, supported by rate-volatility normalization and improved spreads.

Last Quarter Review

Annaly Capital Management’s prior quarter posted revenue of 2.40 billion US dollars, gross margin of 98.47%, GAAP net profit attributable to common shareholders of 1.01 billion US dollars, net profit margin of 94.18%, and adjusted EPS of 0.74, with year-over-year EPS growth of 2.78%. A key highlight was the significant top-line beat versus market estimates, reflecting stronger-than-expected portfolio income and spread capture. Main business performance showed Agency revenue of 677.43 million US dollars, Residential Credit revenue of 11.52 million US dollars, company and other at 0.35 million US dollars, and Mortgage Servicing Rights at negative 101.58 million US dollars, indicating Agency as the primary driver with MSR providing a partial offset during spread moves.

Current Quarter Outlook

Main business: Agency mortgage-backed securities

Agency remains the core earnings contributor given its scale and liquidity, and forecasts point to revenue growth driving this quarter’s performance. With the revenue estimate at 1.66 billion US dollars and adjusted EPS at 0.75, the Agency portfolio’s net interest income is expected to benefit from modestly tighter spreads relative to last year, while hedging keeps book value volatility contained. The gross margin profile near last quarter’s level suggests continued efficiency in funding and asset yields, implying that any incremental spread compression should be manageable for earnings.

Most promising business: Agency carry and securitized spread recovery

The most attractive near-term earnings lever is improved Agency carry as funding costs stabilize and asset yields hold at elevated levels versus the prior year. Expectations for EBIT growth of 24.62% year over year underscore operating leverage as the company scales portfolio income, while the forecast revenue growth of 27.50% indicates a constructive backdrop for coupon income. Should prepayment speeds remain moderate and rate volatility not reaccelerate, the Agency segment is positioned to sustain its contribution to EPS, even as MSR results oscillate with rate path changes.

Key stock-price swing factors this quarter

Earnings sensitivity to interest-rate moves and mortgage-basis spreads will dominate this quarter’s trading reaction. If spreads tighten faster than anticipated, book value and near-term net interest income could see positive revisions; conversely, a widening could pressure fair values and dampen earnings momentum despite strong gross margins. Trading commentary will focus on portfolio rotation within Agency coupons, hedging posture, and any updates on capital allocation or leverage, given their impact on earnings capacity and dividend sustainability.

Analyst Opinions

Recent analyst and institutional commentary during the past six months skews constructive, emphasizing stable to improving net interest income and a favorable setup for Agency MBS carry; bullish views outweigh cautious ones based on the expected 27.50% revenue growth and 7.07% EPS growth this quarter. Well-followed institutional previews highlight that the earnings trajectory remains supported by disciplined hedging and measured leverage, with potential upside if spreads compress into the print. The consensus tilt remains optimistic on near-term earnings durability and dividend coverage, while caution centers on sensitivity to rate-path surprises and basis volatility; the majority view expects the company to meet or slightly exceed revenue and EPS estimates as Agency performance normalizes.