Starwood Property Shares Up on Q2 Earnings Beat, Expenses Decline Y/Y

Shares of Starwood Property Trust, Inc. STWD rose 1.9% during yesterday’s trading session on better-than-expected quarterly results. It reported second-quarter 2025 adjusted distributable earnings of 43 cents per share, which surpassed the Zacks Consensus Estimate of 39 cents. However, the reported figure compares unfavorably with 48 cents per share in the year-ago quarter.

Results were primarily benefited by a decrease in expenses. However, a year-over-year decline in revenues and book value per share (BVPS) acted as a spoilsport.

STWD’s second-quarter 2025 net income (GAAP basis) was $129.8 million, which jumped 66.7% year over year.

Inside Starwood Property’s Headlines

STWD’s total revenues were $444.3 million, down 9.3% year over year.

Total costs and expenses were $430.5 million, down 12.4% from the prior-year quarter. The decline was primarily due to a fall in interest expense, general and administrative management fees, and provision for credit loss.

Starwood Property’s BVPS (GAAP basis) was $18.80 as of June 30, 2025, down 4.3% from $19.64 in the prior-year quarter.

The company recorded fundings of $2.7 billion, which increased from $998 million in the prior-year quarter.

Starwood Property’s Balance Sheet Position

As of June 30, 2025, cash and cash equivalents were $259.9 million, down 41% from the prior quarter.

Loans held for sale totaled $2.5 billion compared with $2.4 billion in the prior quarter.

Our Take on STWD

Starwood Property’s focus on commercial mortgage-backed securities and commercial real estate debt investments continues to generate stable income. Its active engagement in the acquisition and divestiture of properties will enhance its portfolio, optimize its asset base and help it adapt to changing market conditions. However, the year-over-year decline in revenues and BVPS remains a concern.

STARWOOD PROPERTY TRUST, INC. Price, Consensus and EPS Surprise

STARWOOD PROPERTY TRUST, INC. price-consensus-eps-surprise-chart | STARWOOD PROPERTY TRUST, INC. Quote

STWD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other REITs

Annaly Capital Management, Inc. NLY reported second-quarter 2025 adjusted earnings available for distribution (EAD) per average share of 73 cents, which beat the Zacks Consensus Estimate of 72 cents. The figure increased from 68 cents in the year-ago quarter.

NLY’s average yield on interest-earning assets improved in the reported quarter. However, the company recorded a year-over-year decline in BVPS.

Apollo Commercial Real Estate Finance’s ARI second-quarter 2025 distributable earnings per share of 26 cents matched the Zacks Consensus Estimate. However, the bottom line declined from 35 cents in the year-ago quarter.

ARI’s results benefited from a decline in operating expenses. However, the decrease in net interest income and revenue from real estate owned operations acted as a spoilsport.

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

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