Rocket Companies Inc. (NYSE: RKT) shares slightly moved down in the pre-market trading Wednesday after the company announced its financial results for the third quarter.
The Detroit, Michigan-based provider of industry-leading real estate, mortgage and financial services reported earnings of $2.99 billion, or 54 cents per share in the quarter, well above a profit of $495 million in the same period last year. On an adjusted basis, the company earned $1.21 per share, beating consensus forecast of $1.09 per share.
Revenue skyrocketed 186 percent to $4.63 billion in the three-month period ended September 30, as compared to $1.62 billion in the comparable period of 2019. Analysts surveyed by FactSet had projected revenue of $4.55 billion.
Speaking on the results, Rocket’s CEO Jay Farner said in a statement that "in the midst of the pandemic, we were able to help an unprecedented number of Americans buy and refinance homes, providing financial relief through our tech-driven platform and award-winning service. Rocket Companies assisted more clients in the third quarter of 2020 than any quarter in our 35-year history. More importantly, the Company did this while maintaining industry-leading margins and profitability, demonstrating the sheer power of our platform as Rocket executes at incredible scale.”
The company’s total costs in the quarter jumped 46 percent, mainly due to relatively bigger variable compensation and recruitment of new employees. Rocket overall liquidity stood at $6.9 billion as of September 30.
Looking forward, Rocket expects closed loan volume in the range of $88 billion to $93 billion in the fourth quarter, representing a surge of 73 to 83 when compared to $50.8 billion in Q4 last year. Gain on sale margins is expected between 3.80 percent to 4.10 percent in the current quarter, as compared to 3.41 percent in the comparable period last year.
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