Westlake Village-based PennyMac Financial Services reported first-quarter profit of $10.9 million or 47 cents per share on May 5.
The results were lower than Wall Street expectations, which analysts surveyed by Zacks Investment Research had put at 63 cents per share.
PennyMac Financial Services reported $62 million in pretax income for the first quarter of 2017, down about 52 percent from the prior quarter.
The drop in revenue, according to PennyMac, reflects lower production earnings, driven by a reduction in refinance volumes due to higher mortgage rates and a seasonally slow purchase market.
PennyMac Financial was founded by former Countrywide Financial Services executives after that company was acquired by Bank of America.
“PennyMac Financial’s first quarter results reflect the combination of an abrupt rise in mortgage rates at the end of last year and the typical seasonal slowdown in origination volumes,” said President and CEO David Spector. “With respect to mortgage rates, we have recently seen a decline in rates that is expected to improve the second quarter’s mortgage origination outlook. As it pertains to seasonality, strong pending home sales bode well for home buying activity this spring and summer. Looking beyond the next quarter, we continue to invest in PennyMac’s unique operating platform, which we believe will enable us to thrive in a variety of different market conditions.”
Its sister company, PennyMac Mortgage Investment Trust, reported net income of $28.7 million, or 40 cents per common share on a diluted basis, for the first quarter of 2017, on net investment income of $64.5 million.
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