Dynex Capital Q3 EPS Falls Short of Estimates Amid Rising Interest Income

Dynex Capital reported Q3 non-GAAP earnings of $0.25 per share, missing the consensus estimate of $0.26. Earnings rose from Q2's $0.22 per share due to higher interest income and lower operating expenses.

Dynex Capital (NYSE: DX) reported its Q3 non-GAAP earnings on Monday, with a per-share figure of $0.25, which fell short of the average analyst estimate of $0.26. However, the earnings marked a notable improvement from the previous quarter's $0.22 per share, driven primarily by higher interest income and lower operating expenses, according to a Seeking Alpha report.

The company's total economic return of $1.23 per common share, or 10.3% of beginning book value, was comprised of dividends declared of $0.51 per share and an increase in book value of $0.71 per share. This compared favorably to a total economic loss of $0.10 per share in the prior quarter. Book value per common share rose to $12.67 at Sept. 30, 2025, from $11.95 at June 30, 2025.

Economic net interest income climbed to $44.9M in Q3, up from $35.5M in Q2, while the economic net interest spread improved to 1.00% from 0.96%. Total operating expenses declined to $12.0M from $12.3M in the previous quarter. Net loss on derivatives was $10.7M in Q3, a significant improvement over the $58.1M loss in Q2.

During the quarter, Dynex Capital raised $254M in equity capital net of issuance costs through at-the-market stock issuances. The company's stock rose 0.5% in premarket trading following the announcement.

Co-CEO and President Smriti Laxman Popenoe attributed the results to the company's "opportunistic positioning, expert risk management, and the opportunity in a leveraged agency mortgage-backed securities portfolio." She emphasized the company's focus on highly liquid, transparent, and readily valued securities, while maintaining effective risk management and a disciplined investment process.

The company will hold a conference call at 10:00 AM ET to discuss the earnings in more detail.