Invesco Mortgage Capital Inc. Earnings Cheat Sheet: Profits Grow by Double Digits For Fifth Straight Quarter

Invesco Mortgage Capital Inc. (NYSE:IVR) reported higher profit for the third quarter as revenue showed growth. Invesco Mortgage Capital is a real estate investment trust that acquires, finances and manages residential and commercial mortgage-backed securities and mortgage loans.

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Invesco Mortgage Capital Earnings Cheat Sheet for the Third Quarter

Results: Net income for Invesco Mortgage Capital Inc. rose to $81.1 million (79 cents per share) vs. $26.2 million ($1.01 per share) in the same quarter a year earlier. This is a more than threefold rise from the year earlier quarter.

Revenue: Rose more than threefold to $141.3 million from the year earlier quarter.

Actual vs. Wall St. Expectations: IVR fell short of the mean analyst estimate of 87 cents per share. It beat the average revenue estimate of $94.3 million.

Quoting Management: “During the third quarter, we saw an opportunity to acquire high quality assets at attractive levels given the uncertainty created by the U.S. debt ceiling debate and the turmoil in Europe. We also took the opportunity to participate with WL Ross, Invesco Real Estate, and other partners in buying a package of commercial mortgage loans auctioned by a large financial institution,” said Richard King, President and Chief Executive Officer. “We generated $0.79 in earnings for the quarter while investing the proceeds from our capital raises. We believe our portfolio is well positioned for the current environment with the majority of our Agency RMBS invested in prepayment protected pools. While our credit assets have seen declines in prices, the underlying collateral continues to perform and our earnings power remains attractive.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of more than threefold, with the biggest boost coming in the first quarter when revenue rose more than threefold from the year earlier quarter.

The company has now seen net income rise in three straight quarters. In the second quarter, net income rose more than threefold and in the first quarter, the figure rose more than fourfold.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from $1 a share to 88 cents over the last ninety days. The average estimate for the fiscal year is $3.74 per share, down from $3.97 ninety days ago.

Competitors to Watch: Two Harbors Investment Corp (AMEX:TWO), Hatteras Financial Corp. (NYSE:HTS), Capstead Mortgage Corp. (NYSE:CMO), Annaly Capital Management, Inc. (NYSE:NLY), Eastern Light Capital, Inc. (AMEX:ELC), Newcastle Investment Corp. (NYSE:NCT), Cypress Sharpridge Investments, Inc. (NYSE:CYS), Crexus Investment Corp (NYSE:CXS), Chimera Investment Corp. (NYSE:CIM), and Apollo Commercial Real Est. Finance Inc (NYSE:ARI).

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(Source: Xignite Financials)