Book value

Consensus on Dynex Capital’s Q3 earnings trail as volatility drives down book value (NYSE:DX)

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Dynex Capital (NYSE: DX) Third-quarter earnings fell from the prior quarter, hurt by interest rate volatility and widening spreads, sending its book value per share down 15%, the mortgage REIT said Monday.

Q3 adjusted EPS of $0.24, below average analysts’ estimate of $0.31, rose from $0.40 in the second quarter.

“The third quarter of 2022, and in particular September, continued to be defined by extreme interest rate volatility and widening spreads due to rising domestic interest rates and geopolitical factors,” CEO Byron L. Boston said. “While we experienced a decline in book value during the quarter related to this volatility and widening spreads, our liquidity remains strong.”

Net interest income of $7.12m decreased from $14.1m in Q2 and $15.7m in Q1. Adjusted net interest income fell to $23.4m in Q3 from $25.1m in the prior quarter.

Adjusted net interest spread of 1.12% in Q3 versus 1.84% in the prior quarter.

Book value decreased to $14.23 per share as of September 30, 2022, from $16.79 as of June 30.

The total economic loss of $2.17 per share, or 12.9% of initial book value, was comprised of a decline in book value per common share of -$2.56, partially offset by declared dividends of $0.39 per share in Q3.

Cash and cash equivalents were $260.4 million as of September 30 versus $325.7 million as of June 30.

Dynex (DX) shares have gained 0.9% in Monday’s premarket trade.

Conference call at 10:00 a.m. ET.

Previously, Dynex Capital (DX) non-GAAP EPS of $0.24 was missing $0.07, net interest income of $7.12M