BETHESDA, Md. - AGNC Investment Corp (NASDAQ: NASDAQ:AGNC) disclosed its first-quarter earnings, matching Wall Street's expectations for adjusted earnings per share (EPS) but failing to meet revenue forecasts. The company reported an adjusted EPS of $0.58, precisely in line with the analyst consensus. However, adjusted net interest and dollar roll income for the quarter was $496 million, falling below the expected $567.47 million.
The investment firm's stock saw a modest increase of 0.54% following the earnings release, indicating a slightly positive investor reaction to the news. This uptick in share price comes despite the revenue shortfall and reflects the market's tempered response to the company's performance.
AGNC's President and CEO, Peter Federico, commented on the quarter's results, highlighting the 5.7% economic return on tangible common equity. He attributed this performance to a favorable macroeconomic environment for fixed income investors, which began in late 2023 and continued through the first quarter of 2024. Federico noted the decline in interest rate volatility and stability in Agency MBS spreads as positive factors. He also mentioned the Federal Reserve's indication that short-term rates had likely reached their peak for the current monetary policy cycle.
Bernice Bell, AGNC's Executive Vice President and Chief Financial Officer, emphasized the company's $0.58 per common share of net spread and dollar roll income, excluding 'catch-up' premium amortization. She also pointed out the company's modest leverage increase to 7.1x at the end of the first quarter, compared to 7.0x at the end of the fourth quarter, and the maintenance of a strong liquidity position with $5.4 billion of unencumbered cash and Agency MBS.
While the company's earnings have aligned with analyst predictions, the revenue miss may prompt investors to look closely at AGNC's strategies and operations in the upcoming quarters. However, the slight uptick in stock price suggests that investors are not overly concerned with the revenue discrepancy at this time.
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