Dynex Capital Scheduled to Report Q2 Earnings: What's in the Cards?

Dynex Capital, Inc.  DX is scheduled to report second-quarter 2025 results on July 21, before market close. The company’s results are expected to reflect growth in revenues and earnings from the year-ago reported figures.

In the last reported quarter, the mortgage real estate investment trust (mREIT) posted earnings available for distribution per share of 20 cents, which surpassed the Zacks Consensus Estimate. A rise in net interest income (NII) supported the results. However, the company registered a year-over-year decline in book value per share.

DX earnings beat the Zacks Consensus Estimate in one of the trailing four quarters and missed thrice, the average negative surprise being 82.9%.

Dynex Capital, Inc. Price and EPS Surprise

Dynex Capital, Inc. price-eps-surprise | Dynex Capital, Inc. Quote

Key Factors to Impact DX in Q2

Despite interest rate cuts by the Federal Reserve in 2024, mortgage rates did not come down meaningfully. In the second quarter, mortgage rates fluctuated, but they remained in the mid-to-upper 6% range. As such, refinancing activities and origination volumes witnessed decent growth.

Amid this, Dynex’s mortgage-backed securities (MBS) holdings are anticipated to have witnessed higher levels of constant prepayment rates. This is expected to have supported the company’s interest income growth. 

The primary-secondary spread has averaged 1.06% in the second quarter of 2025, below the first quarter’s average of 1.12%. Due to increased volatility in the market, the primary-secondary spread was slightly skewed. As such, DX’s gain on sale margins in the second quarter of 2025 are likely to have been relatively steady.

With primary-secondary spreads relatively stable and increased mortgage rate volatility, Dynex is likely to have seen a decline in its book value per share in the quarter to be reported.

What the Zacks Model Reveals for Dynex

Our proven model does not conclusively predict an earnings beat for Dynex this time around. This is because the company does not have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: Dynex has an Earnings ESP of 0.00%.

Zacks Rank: DX currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for DX’s second-quarter earnings of 49 cents per share has been unchanged in the past seven days. The figure indicates a rise from a loss per share of 12 cents in the year-ago quarter.

The Zacks Consensus Estimate for revenues is pegged at $23.5 million, whereas it reported revenues of $1.3 million in the year-ago quarter.

REIT Stocks That Warrant a Look

Two stocks from the broader REIT sector, which you may want to consider, as our model shows that these have the right combination of elements to report a surprise this time around, are ARMOUR Residential REIT, Inc. ARR and Vornado Realty Trust VNO.

ARMOUR Residential REIT is expected to report second-quarter 2025 results on July 23. ARR presently has an Earnings ESP of +1.86% and a Zacks Rank of 3. Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Vornado Realty Trust is expected to report second-quarter 2025 results on August 4. VNO currently has an Earnings ESP of +2.27% and a Zacks Rank of 3.

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This article originally published on Zacks Investment Research (zacks.com).

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