Dynex Capital Earnings: Here’s Why Investors Don’t Like These Results

Dynex Capital Inc. (NYSE:DX) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 9.89%.

Dynex Capital Inc. Earnings Cheat Sheet


Revenue: Decreased 25.18% to $22.44 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Dynex Capital Inc. reported adjusted EPS income of $0.54 per share. By that measure, the company beat the mean analyst estimate of $0. It beat the average revenue estimate of $0.

Quoting Management: Mr. Thomas Akin, Chairman and Chief Executive Officer, commented, “Mortgage REIT portfolios experienced a volatile combination of rising rates and spreads during the second quarter that sent book values substantially lower. Leverage ratios were also affected and moved sharply higher for most mortgage REITs as book values dropped. At Dynex, we were disappointed to see our book value decrease, but our business model and portfolio remain largely intact as our leverage moved modestly higher and yet remained within our targets. Additionally, because we did not invest in 15-year or 30-year mortgages but instead invested in securities with shorter maturities and more predictable cash flows, our duration extension in the quarter was minimal. Going forward, we expect to maintain our leverage target below 6.5 times consistent with our investment discipline. Our conservative investment strategy of low duration, high quality investments remains applicable in the current environment, and we expect to recover shareholder value as our portfolio rolls down the yield curve and as markets stabilize.”

Key Stats (on next page)…

Revenue decreased 0% from $0 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a loss of $0 and has not changed. For the current year, the average estimate is a loss of $0, which is the same with that ninety days ago.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute – click here and get our CHEAT SHEET stock picks now.

(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)