Starwood Property Trust ( NYSE: STWD ) posted Q3 earnings that came in slightly lower than the Street consensus even as higher interest rate bolstered its net interest income against a backdrop of volatile markets and a weakening real estate market.
The real estate finance company headed by Barry Sternlicht posted Q3 distributable EPS of $0.51 that fell short of the consensus estimate by a penny, and was unchanged from $0.51 in Q2.
Q3 total revenue of $390.5M, trailing the average analyst estimate of $393.7M, climbed from $294.0M in the previous quarter.
Starwood's ( STWD ) investment activity of $1.3B, including $0.9B of commercial lending, dropped from $3.8B in Q2.
The company said 99% of its commercial and 97% of its infrastructure lending portfolios are floating rate, making them positively correlated to rising interest rates.
A 100-basis-point increase in rates resulted in $42M additional annual net interest income.
Undepreciated book value per share of $21.69 at Sept. 30, 2022 increased from $21.51 at June 30.
During the quarter, Starwood Property Trust ( STWD ) obtained eight new servicing assignments with unpaid principal balance of $5.7B, bringing its named portfolio to $107.4B and making its LNR unit the largest special servicer in the U.S.
Commercial portfolio carrying value as $16.4B at Sept. 30, 2022, essentially flat from June 30 and up from $14.2B at Dec. 31, 2021.
Residential portfolio carrying value of $2.60B at Sept. 30, 2022, slipped from $2.60B at June 30 and $2.90B at Dec. 31, 2021.
Q3 total costs and expenses of $336.6M increased from $262.3M in Q2.
Conference call at 10:00 AM ET.
Earlier, Starwood Property Trust non-GAAP EPS of $0.51 misses by $0.01, revenue of $390.54M misses by $3.15M
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Starwood Property Trust Q3 earnings just miss consensus amid choppy markets