Annaly Capital posts Q3 earnings above its dividend

Annaly Capital Management reported third-quarter earnings available for distribution of $0.80 per share, two cents above estimates. Revenue reached $1.97 billion, above the $1.83 billion expected.

Chief Executive Officer David Finkelstein said the quarter was challenging for fixed income markets, but cycle-low leverage and minimal duration exposure let the company actively manage its portfolio while generating earnings above its dividend.

Annaly declared a quarterly common stock dividend of $0.75 per share, unchanged from the prior payout. The company also said it would redeem all outstanding shares of its $442.5 million 6.750% Series I fixed-to-floating rate preferred stock, effective October 1, 2026.

Covering the dividend with earnings available for distribution is the detail worth watching this quarter, since many mortgage REITs have struggled to do so amid volatile rate swings. Redeeming the preferred stake ahead of its reset date removes a relatively expensive slice of Annaly's capital structure, cutting future financing costs regardless of where short-term rates move next. Keeping leverage and duration exposure low going into a quarter management already expected to be difficult appears to have limited losses even as rates stayed unsettled, while holding the dividend steady with earnings above it leaves room for future portfolio changes without forcing an immediate payout decision.