Why Is AGNC Investment (AGNC) Up 6.6% Since Last Earnings Report?

Core Viewpoint - AGNC Investment's recent earnings report indicates a decline in key financial metrics, with a comprehensive loss per share and a downward trend in estimates, raising questions about future performance leading up to the next earnings release [1][3][11]. Financial Performance - The fourth-quarter 2024 net spread and dollar roll income per common share was 37 cents, missing the Zacks Consensus Estimate of 42 cents, and down from 60 cents in the year-ago quarter [2] - Adjusted net interest and dollar roll income was $405 million, an 18.5% decline from the previous year [2] - The comprehensive loss per common share was 11 cents, compared to a comprehensive income of 1 cent per share in the year-ago quarter [3] - For 2024, net spread and dollar roll income per common share was $1.88, missing the consensus estimate of $1.95 and down from $2.61 in 2023 [3] Income and Expenses - Net interest income (NII) was $115 million, missing the Zacks Consensus Estimate by 23.7%, while net interest expenses were $26 million in the prior-year quarter [4] - For 2024, NII was $18 million, significantly below the Zacks Consensus Estimate of $314 million, but improved from $246 million in net interest expenses in 2023 [4] Asset Yield and Cost of Funds - The average asset yield on the portfolio was 5.02% in the fourth quarter, up from 4.55% in the fourth quarter of 2023 [4] - The combined weighted average cost of funds was 2.89%, compared to 1.39% in the fourth quarter of 2023 [5] - The average net interest spread was 1.91%, down from 3.08% in the previous quarter [5] Investment Portfolio - As of December 31, 2024, AGNC's investment portfolio totaled $73.3 billion, including $65.5 billion of Agency mortgage-backed securities [7] - The average actual constant prepayment rate was 9.6%, up from 6.2% in the year-ago quarter [6] Balance Sheet and Cash Position - Cash and cash equivalents totaled $505 million, down 0.4% from the prior quarter [9] - The tangible net book value per common share was $8.41, down 3.3% year-over-year [6] Dividend Information - AGNC announced a dividend of 12 cents per share for each month in the fourth quarter, totaling $0.36 per share [10] - Since its IPO in May 2008, the company has declared $14 billion in common stock dividends [10] Market Sentiment and Outlook - There has been a downward trend in estimates revisions, indicating a negative sentiment among investors [11] - AGNC Investment holds a Zacks Rank 3 (Hold), suggesting an expectation of an in-line return in the coming months [13]