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PennyMac (PFSI) Q2 Earnings Beat Estimates on Higher Revenues
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PennyMac Financial Services, Inc. (PFSI - Free Report) reported second-quarter 2020 earnings per share of $4.39, beating the Zacks Consensus Estimate of $3.04. Further, the figure comes in significantly above the prior-year quarter’s 92 cents per share.
Higher revenues on the back of a rise in loan origination fees aided the results. Also, the liquidity position remained strong. However, higher expenses were an undermining factor.
The company reported net income of $352.7 million compared with $72.7 million recorded in the year-ago quarter.
Revenues Increase, Costs Rise
Total net revenues more than doubled year over year to $821.6 million in the second quarter of 2020. The increase primarily stemmed from a substantial rise in net gains on loans held for sale at fair value along with higher loan origination fees (up 59.6%), partly offset by a fall in net loan servicing fees (down 62.2%) and net interest income. The reported figure also surpassed the Zacks Consensus Estimate of $677 million.
Total expenses were $341.3 million, up 67.8% from the prior-year quarter. This rise chiefly resulted from higher volumes of activity in the production segment.
Balance Sheet
As of Jun 30, 2020, cash and cash equivalents were $910.3 million compared with $878.8 million in the prior quarter.
PennyMac’s total assets amounted to $23.2 billion, up from $10.9 million recorded as of Mar 31, 2020. Book value per share increased to $34.26 from $29.85 as of Mar 31, 2020.
Capital Deployment Update
The company’s board of directors increased the second-quarter common stock dividend by 25%. The new dividend will be paid out on Aug 28 to shareholders of record as of Aug 17, 2020.
Conclusion
PennyMac put up a decent performance during the April-June period. The company’s move to develop production technology seems to be working well. Also, its focus on long-term growth of its direct lending platforms augurs well for the long haul.
PennyMac Financial Services, Inc. Price and EPS Surprise
First Republic Bank delivered an earnings surprise of 16.7% in second-quarter 2020 aided by solid top-line strength. Earnings per share of $1.40 surpassed the Zacks Consensus Estimate of $1.20. Additionally, the bottom line climbed 12.9% from the year-ago quarter.
First Horizon National Corporation (FHN - Free Report) reported second-quarter 2020 adjusted earnings per share of 20 cents, missing the Zacks Consensus Estimate of 21 cents. Further, the bottom line was 52.4% lower than the year-ago figure.
LendingTree (TREE - Free Report) reported second-quarter 2020 adjusted net income per share of 46 cents, missing the Zacks Consensus Estimate of 61 cents. Further, the figure comes in lower than the prior-year quarter’s $1.18 per share.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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PennyMac (PFSI) Q2 Earnings Beat Estimates on Higher Revenues
PennyMac Financial Services, Inc. (PFSI - Free Report) reported second-quarter 2020 earnings per share of $4.39, beating the Zacks Consensus Estimate of $3.04. Further, the figure comes in significantly above the prior-year quarter’s 92 cents per share.
Higher revenues on the back of a rise in loan origination fees aided the results. Also, the liquidity position remained strong. However, higher expenses were an undermining factor.
The company reported net income of $352.7 million compared with $72.7 million recorded in the year-ago quarter.
Revenues Increase, Costs Rise
Total net revenues more than doubled year over year to $821.6 million in the second quarter of 2020. The increase primarily stemmed from a substantial rise in net gains on loans held for sale at fair value along with higher loan origination fees (up 59.6%), partly offset by a fall in net loan servicing fees (down 62.2%) and net interest income. The reported figure also surpassed the Zacks Consensus Estimate of $677 million.
Total expenses were $341.3 million, up 67.8% from the prior-year quarter. This rise chiefly resulted from higher volumes of activity in the production segment.
Balance Sheet
As of Jun 30, 2020, cash and cash equivalents were $910.3 million compared with $878.8 million in the prior quarter.
PennyMac’s total assets amounted to $23.2 billion, up from $10.9 million recorded as of Mar 31, 2020. Book value per share increased to $34.26 from $29.85 as of Mar 31, 2020.
Capital Deployment Update
The company’s board of directors increased the second-quarter common stock dividend by 25%. The new dividend will be paid out on Aug 28 to shareholders of record as of Aug 17, 2020.
Conclusion
PennyMac put up a decent performance during the April-June period. The company’s move to develop production technology seems to be working well. Also, its focus on long-term growth of its direct lending platforms augurs well for the long haul.
PennyMac Financial Services, Inc. Price and EPS Surprise
PennyMac Financial Services, Inc. price-eps-surprise | PennyMac Financial Services, Inc. Quote
Currently, PennyMac sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Performance of Other Finance Stocks
First Republic Bank delivered an earnings surprise of 16.7% in second-quarter 2020 aided by solid top-line strength. Earnings per share of $1.40 surpassed the Zacks Consensus Estimate of $1.20. Additionally, the bottom line climbed 12.9% from the year-ago quarter.
First Horizon National Corporation (FHN - Free Report) reported second-quarter 2020 adjusted earnings per share of 20 cents, missing the Zacks Consensus Estimate of 21 cents. Further, the bottom line was 52.4% lower than the year-ago figure.
LendingTree (TREE - Free Report) reported second-quarter 2020 adjusted net income per share of 46 cents, missing the Zacks Consensus Estimate of 61 cents. Further, the figure comes in lower than the prior-year quarter’s $1.18 per share.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>