PennyMac Financial beats analyst estimates for second quarter
Westlake Village-based PennyMac Financial Services reported a net income of $74.3 million for the second quarter of 2016 on revenue of $207.8 million, exceeding analyst projection on earnings per share and revenue.
PennyMac Financial, which was founded by former Countrywide Financial Services executives after that company was acquired by Bank of America, reported earnings of 65 cents per diluted share — 7 cents above analyst estimates. Revenue was up to 5.8 percent year-over-year, beating Wall Street’s mark by $11.3 million.
“Volumes in the mortgage origination market have increased in reaction to lower rates; however, industry capacity constraints are moderating the growth in market volumes and should contribute to a prolonged period of elevated origination volumes and margins,” Chairman and CEO Stanford Kurland said in a news release. “PennyMac Financial’s leading position in mortgage banking and our best-in-class, scalable operating platform make us uniquely positioned to capitalize on the opportunity.”
Total loan production activity of $16.1 billion in unpaid principal balance was up 48 percent from the prior quarter. Net assets under management were approximately $1.6 billion, down 4 percent.
Shares traded up 17.7 percent, up $2.33 cents to $15.48 at the market’s close on Aug. 4.
One of PennyMac Financial’s primary investment customers is PennyMac Mortgage Investment Trust, a separate public company that invests in mortgages and shares the same executive management with PennyMac Financial.
PennyMac Mortgage reported a net loss of $5.3 million, or an 8 cent loss per diluted share, for the second quarter of 2016 on net investment income of $47.6 million. Net interest income was $15.2 million, down 2.7 percent year-over-year.
“PMT’s loss is clearly disappointing, and our financial performance did not meet expectations in the second quarter,” Kurland said in a news release. “In particular, our distressed loan investments underperformed, mostly as a result of longer timelines and higher expected expenses on liquidations of nonperforming loans as well as home prices lower than previously forecast.”
Shares closed down 9.3 percent on Aug. 4, decreasing $1.52 to $14.88.
PennyMac recently moved its headquarters to Westlake Village at 3043 Townsgate Road, Ste. 200, but still maintains its office in Moorpark, a spokesman told the Business Times.
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