NYSE$IVR

Invesco Mortgage Capital Inc · Q1 2023 earnings

Q1 2023 earnings · · Investor relations

Briefing

Announced financial results with net income per share of $0.39 and earnings available for distribution per common share of $1.50.

Invesco Mortgage Capital Inc. reported financial results for the quarter ended March 31, 2023. The company's book value per common share ended the quarter at $12.61, representing a modest decline of 1.4% from year end, and when combined with our $0.40 common dividend produced an economic return of 1.7% for the quarter. Earnings available for distribution remained strong at $1.50 per common share.

  • Net income per common share was $0.39, compared to $0.84 in Q4 2022.
  • Earnings available for distribution per common share was $1.50, compared to $1.46 in Q4 2022.
  • Common stock dividend was $0.40 per common share, compared to $0.65 in Q4 2022.
  • Book value per common share was $12.61, compared to $12.79 at Q4 2022.

Headline financials

Total Revenue

$19.6M

Previous: $44.3M-55.8%
EPS (adj)

$1.50

Previous: $1.20+25.0%
Average Earning Asset Yields

5.3%

Previous: 2.4%+119.1%
Average Cost of Funds

4.2%

Previous: -0.1%+3100.0%
Average Net Interest Rate Margin

1.1%

Previous: 2.5%-57.6%
Book Value Per Common Share

$12.61

Previous: $2.08+506.2%
Debt-to-Equity Ratio

5.8

Previous: 5.2+11.5%
Effective Interest Rate Margin

5.3%

Previous: 2.3%+130.4%
Economic Debt-to-Equity Ratio

5.8

Previous: 6.5-10.8%
Free Cash Flow

$21.5M

Previous: -$228M+109.4%
Net Income

$21.5M

Previous: -$228M+109.4%
Operating Income

$14.5M

Previous: $37M-60.8%
Gross Profit

$19.6M

Previous: $44.3M-55.8%
Cash & Equivalents

$102M

Previous: $252M-59.5%
Total Assets

$5.71B

Previous: $7.08B-19.4%

Revenue & EPS history

Invesco Mortgage Capital · Revenue · Quarterly

$19.6M

Q1 2023-55.8%vs Q1 2022
Beat estimate in 3 of 14 quarters(21%)
ActualEstimate

Forward guidance

Invesco Mortgage Capital anticipates compelling opportunities for new investments in Agency RMBS due to historically attractive valuations and reduced demand from the Federal Reserve and commercial banks. The conclusion of the Federal Reserve’s tightening cycle is expected to reduce interest rate volatility, providing a tailwind for their target assets.

Tailwinds

  • Agency RMBS are at historically attractive valuations.
  • Reduced demand from the Federal Reserve and commercial banks will provide compelling opportunities for new investments.
  • The conclusion of the Federal Reserve’s tightening cycle will result in a reduction in interest rate volatility.
  • Hedging strategy benefits from low-cost, pay-fixed swaps with a weighted average maturity of over seven years.
  • Company retains capital and enhance book value by continuing to invest in Agency RMBS

Headwinds

  • Volatile environment for Agency residential mortgage-backed securities (“Agency RMBS”) continued during the first quarter of 2023.
  • Strong performance in January was more than offset by sharp underperformance in February and March amidst the slowing disinflationary trend in economic data and turmoil in the regional banking sector.
  • Book value per common share ended the quarter at $12.61, representing a modest decline of 1.4% from year end
  • Reduced first quarter dividend to $0.40 per share.
  • Average net interest rate margin decreased 90 basis points to 1.08% in the first quarter of 2023 compared to the fourth quarter of 2022.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2023

Historical avgQ1 2023

-0.1%

Avg return

Earnings day

-0.5%

Avg return

5 days after

-2.8%

Avg return

30 days after

46%

30 / 65 earnings

Positive

+13.3%

Q3 2020

Best reaction

-8.4%

Q3 2013

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+0.0%+1.7%-2.7%
Q4 2025-3.4%-0.1%-5.3%
Q3 2025+0.3%+0.4%+9.2%
Q2 2025-0.4%-0.4%-1.7%
Q1 2025+1.8%+3.8%+3.0%
Q4 2024-0.9%-1.3%-3.1%
Q3 2024-1.0%+3.5%+3.7%
Q2 2024+1.4%-0.5%+0.1%
Q1 2024+1.4%+1.4%+0.4%
Q4 2023-0.1%+2.1%+9.2%
Q3 2023-3.6%-4.4%+2.8%
Q2 2023-2.2%-1.9%-3.4%
Q1 2023+6.6%+4.6%+3.7%
Q4 2022-4.2%-6.1%-23.3%
Q3 2022-2.2%+2.0%+14.3%
Q2 2022+2.0%+1.9%-7.9%
Q1 2022-8.1%-9.7%-5.4%
Q4 2021-6.3%-11.4%-13.7%
Q3 2021+1.9%+2.8%-7.8%
Q2 2021-6.7%-7.9%-9.6%
Q1 2021-5.2%-7.3%-12.3%
Q4 2020+3.2%+5.1%+4.9%
Q3 2020+13.3%+11.8%+17.8%
Q2 2020+3.8%+3.8%-8.9%
Q1 2020-3.7%-15.4%-21.9%
Q4 2019+0.5%-0.8%-69.4%
Q3 2019+3.5%+2.9%+5.1%
Q2 2019+2.6%+1.7%-7.5%
Q1 2019-0.2%-0.7%-1.6%
Q4 2018-0.4%+0.0%+0.7%
Q3 2018-0.8%-0.1%+2.1%
Q2 2018-1.4%-1.9%+1.3%
Q1 2018+2.3%-0.1%+1.6%
Q4 2017-2.1%-1.3%-0.1%
Q3 2017-1.5%-1.7%+7.5%
Q2 2017+1.9%+0.8%+0.5%
Q1 2017+0.4%-2.9%+2.7%
Q4 2016-0.2%-1.4%-2.6%
Q3 2016+0.7%+0.1%-2.1%
Q2 2016+4.7%+5.7%+7.7%
Q1 2016+4.4%
Q4 2015+5.1%
Q3 2015+2.3%
Q2 2015+0.3%
Q1 2015+1.0%
Q4 2014+3.4%
Q3 2014-2.4%
Q2 2014+0.5%
Q1 2014+0.3%
Q4 2013-1.8%
Q3 2013-8.4%
Q2 2013-3.3%
Q1 2013-3.4%
Q4 2012-1.1%
Q4 2011-1.3%
Q3 2012+1.3%
Q2 2012-2.5%
Q1 2012-0.3%
Q3 2011-1.0%
Q2 2011+4.8%
Q1 2011+0.5%
Q4 2010+0.6%
Q3 2010-1.5%
Q2 2010-0.6%
Q1 2010-1.0%

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