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PennyMac (PFSI) to Report Q4 Earnings: What's in the Offing?

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PennyMac Financial Services, Inc. (PFSI - Free Report) is scheduled to report fourth-quarter 2019 results, after the market on Feb 6. The company’s revenues and earnings are projected to reflect year-over-year increases.

In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results reflected growth in revenues and higher expenses.

The company has an impressive earnings surprise history. Its earnings surpassed the consensus estimate in three of the trailing four quarters, the average beat being 12.1%.
 

Further, the company’s activities in the fourth quarter were adequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for earnings of $1.57 moved up 4.7%, over the last seven days. The figure indicates a year-over-year increase of 149.2%.

Let’s see how things have shaped up for this announcement.

The company does not have the right combination of the two key ingredients for a possible earnings beat — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold).

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for the stock is currently pegged at -5.10%.

Zacks Rank: PennyMac currently sports a Zacks Rank of 1, which increases the predictive power of ESP. But we also need to have a positive ESP to be confident of a positive earnings surprise. You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Factors

PennyMac’s top line is likely to have benefited from increase in mortgage loan originations and refinancing activities in the fourth quarter on account of lower mortgage rates.

However, the company’s other investments portfolio’s interest income might have been affected due to relatively lower interest rates. The Zacks Consensus Estimate for quarterly sales of $444.3 million reflects an increase of 76.9% from the year-ago reported figure.

Moreover, as salaries and benefits costs continue to increase, overall expenses are expected to have flared up in the soon-to-be-reported quarter. Also, the company’s efforts to expand into new markets and products might have escalated expenses.

Among other finance stocks, Bank of N.T. Butterfield & Son Limited (The) (NTB - Free Report) , Fidelity National Information Services, Inc. (FIS - Free Report) and Main Street Capital Corporation (MAIN - Free Report) are slated to release results on Feb 12, Feb 13 and Feb 27, respectively.

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