Annaly Capital Management posted second-quarter net earnings of $120.8 million, compared with a loss of $218.2 million a year earlier.
In the first quarter, the New York real estate investment trust - whose forte is investing in agency mortgage-backed securities - earned just shy of $700 million.
Annaly's chief executive, Michael Farrell, in a press release Monday cited "uncertainty surrounding sovereign credit risk, regulatory reform and tepid economic performance" as a factor in asset value fluctuations, but also said "the long-term implication of these conditions is that the very favorable operating environment in which we find ourselves is likely to persist."
Its asset base grew to $100 billion at midyear, a 37% increase from June 30, 2010.
Sandler O'Neill called Annaly's results "impressive," saying "they were achieved with the lowest leverage among the pure-play agency mortgage REITs. While we expect asset yields to compress over the next few quarters, we expect spreads to remain very attractive by historical standards and the company's low leverage give it the flexibility to offset spread compression by increasing leverage."
On Wednesday, Annaly's stock was up slightly to $17.50.
