American Capital Mortgage Investment (MTGE) Reports Q2 Loss of $0.80

American Capital Mortgage Investment (NASDAQ: MTGE) reported Q2 EPS of ($0.80), versus $0.59 reported last year.

"Fixed income markets around the globe continued to be extremely volatile during the second quarter," commented Gary Kain, President and Chief Investment Officer. "This challenging environment led to negative economic earnings for the quarter as higher rates, a steeper yield curve, and wider spreads caused agency MBS to post their second worst quarterly performance over the last seven years. The performance of legacy non-agency MBS was more neutral, as the increased interest rate and spread volatility was offset somewhat by continued improvement in several key housing fundamentals such as house prices, employment growth and favorable delinquency trends."

"In response to these volatile market conditions, we continued to prioritize risk management and long term portfolio flexibility over short term returns," continued Mr. Kain. "Specifically, we increased our capital allocation to the non-agency sector, further reduced our agency leverage, and enhanced the underlying credit quality of our non-agency portfolio. Looking ahead, while the recent moves in interest rates and spreads adversely impacted our book value in the second quarter, these changes also enhance the expected return on future investment opportunities. Moreover, our current low risk profile gives us significant capacity to meaningfully grow our portfolio as more attractive investment opportunities arise."

"Global and domestic bond markets continue to experience a period of unusually high volatility as uncertainty surrounding weakness in China and parts of Europe collides with the potential for near term rate hikes in the U.S.," commented John Erickson, Chief Financial Officer and Executive Vice President. "Given this challenging environment, we continue to be disciplined with regard to our deployment of capital. History teaches us that there are some environments where patience is critical with respect to both investment decisions and strategic positioning. I believe that our disciplined approach will enable us to generate attractive risk-adjusted returns for our shareholders over the long term."

For earnings history and earnings-related data on American Capital Mortgage Investment (MTGE) click here.

You May Also Be Interested In

• Blackhawk Network (HAWK) Reports Q2 Loss of $0.07; Offers Guidance
• Birchtech Corp. (BCHT) Misses Q2 EPS by 7c
• Eledon Pharmaceuticals, Inc. (ELDN) Misses Q2 EPS by 12c