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Rithm Capital (RITM) to Post Q3 Earnings: Here's What to Expect
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Rithm Capital Corp. (RITM - Free Report) is set to report its third-quarter 2022 results on Nov 2, before the opening bell.
In the last reported quarter, the leading capital provider reported adjusted operating earnings per share of 31 cents, beating the Zacks Consensus Estimate by 6.9% due to expense reduction in operating companies, especially in the mortgage company.
Earnings Surprise History
Rithm Capital’s earnings beat the consensus estimate in all the prior four quarters, with the average being 11.7%. This is depicted in the graph below:
The Zacks Consensus Estimate for third-quarter interest income indicates 30.3% year-over-year growth. While the increased interest rate environment is expected to have helped Rithm Capital generate higher returns from some of its investments and consumer loans, its interest rate hedging arrangements are likely to have protected it from growing interest expenses.
Increased fees and its Caliber acquisition are expected to have supported Rithm Capital’s servicing revenue growth. The consensus mark for third-quarter net servicing revenues indicates 84.4% growth from the prior-year figure. This is likely to have positioned the company for massive revenue growth.
The consensus estimate for Rithm Capital’s third-quarter revenues of $862 million indicates a significant rise from the year-ago reported figure of $190.6 million.
However, the Zacks Consensus Estimate for net gain on originated residential mortgage loans, held-for-sale, for the third quarter indicates a 56.3% year-over-year decline. The rising inflation level is also expected to have led to higher expenses for RITM, which is likely to have affected its profits in the third quarter. This is expected to have led to a year-over-year decline in earnings and made an earnings beat uncertain.
The Zacks Consensus Estimate for third-quarter earnings per share of 25 cents has witnessed no movement in the past week. The estimated figure projects a decrease of 43.2% from the prior-year reported number.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Rithm Capital this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of +14.48%. The Most Accurate Estimate is currently pegged at 29 cents per share, higher than the Zacks Consensus Estimate of 25 cents.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Rithm Capital currently carries a Zacks Rank #5 (Strong Sell).
Stocks to Consider
While an earnings beat looks uncertain for Rithm Capital, here are some companies in the broader Finance space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
Oaktree Specialty Lending Corporation (OCSL - Free Report) has an Earnings ESP of +2.70% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Oaktree Specialty’s current quarter bottom line indicates 18.8% year-over-year growth. OCSL beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 3.3%.
Trupanion, Inc. (TRUP - Free Report) has an Earnings ESP of +3.51% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Trupanion’s top line for the to-be-reported quarter indicates 27.3% year-over-year growth. TRUP beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 44.79%.
Trean Insurance Group, Inc. has an Earnings ESP of +11.11% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Trean Insurance’s bottom line for the to-be-reported quarter is pegged at 9 cents per share, which witnessed one upward revision in the past 30 days against none in the opposite direction. The consensus mark for TIG’s revenues is pegged at $68.4 million, indicating 20.1% year-over-year growth.
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Rithm Capital (RITM) to Post Q3 Earnings: Here's What to Expect
Rithm Capital Corp. (RITM - Free Report) is set to report its third-quarter 2022 results on Nov 2, before the opening bell.
In the last reported quarter, the leading capital provider reported adjusted operating earnings per share of 31 cents, beating the Zacks Consensus Estimate by 6.9% due to expense reduction in operating companies, especially in the mortgage company.
Earnings Surprise History
Rithm Capital’s earnings beat the consensus estimate in all the prior four quarters, with the average being 11.7%. This is depicted in the graph below:
Rithm Capital Corp. Price and EPS Surprise
Rithm Capital Corp. price-eps-surprise | Rithm Capital Corp. Quote
Let’s see how things have shaped up prior to the third-quarter earnings announcement.
Factors to Note
The Zacks Consensus Estimate for third-quarter interest income indicates 30.3% year-over-year growth. While the increased interest rate environment is expected to have helped Rithm Capital generate higher returns from some of its investments and consumer loans, its interest rate hedging arrangements are likely to have protected it from growing interest expenses.
Increased fees and its Caliber acquisition are expected to have supported Rithm Capital’s servicing revenue growth. The consensus mark for third-quarter net servicing revenues indicates 84.4% growth from the prior-year figure. This is likely to have positioned the company for massive revenue growth.
The consensus estimate for Rithm Capital’s third-quarter revenues of $862 million indicates a significant rise from the year-ago reported figure of $190.6 million.
However, the Zacks Consensus Estimate for net gain on originated residential mortgage loans, held-for-sale, for the third quarter indicates a 56.3% year-over-year decline. The rising inflation level is also expected to have led to higher expenses for RITM, which is likely to have affected its profits in the third quarter. This is expected to have led to a year-over-year decline in earnings and made an earnings beat uncertain.
The Zacks Consensus Estimate for third-quarter earnings per share of 25 cents has witnessed no movement in the past week. The estimated figure projects a decrease of 43.2% from the prior-year reported number.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Rithm Capital this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of +14.48%. The Most Accurate Estimate is currently pegged at 29 cents per share, higher than the Zacks Consensus Estimate of 25 cents.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Rithm Capital currently carries a Zacks Rank #5 (Strong Sell).
Stocks to Consider
While an earnings beat looks uncertain for Rithm Capital, here are some companies in the broader Finance space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
Oaktree Specialty Lending Corporation (OCSL - Free Report) has an Earnings ESP of +2.70% and is a Zacks #3 Ranked player.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Oaktree Specialty’s current quarter bottom line indicates 18.8% year-over-year growth. OCSL beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 3.3%.
Trupanion, Inc. (TRUP - Free Report) has an Earnings ESP of +3.51% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Trupanion’s top line for the to-be-reported quarter indicates 27.3% year-over-year growth. TRUP beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 44.79%.
Trean Insurance Group, Inc. has an Earnings ESP of +11.11% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Trean Insurance’s bottom line for the to-be-reported quarter is pegged at 9 cents per share, which witnessed one upward revision in the past 30 days against none in the opposite direction. The consensus mark for TIG’s revenues is pegged at $68.4 million, indicating 20.1% year-over-year growth.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.