Mortgage servicing company Ocwen Financial Corp. (OCN -0.54%) reported an unexpected first-quarter profit on Wednesday, sending shares higher. As of 3 p.m. EDT, the stock was up by nearly 10%, and had reached a new 52-week high during the day.
Analysts had been expecting a loss of $0.30 per share, but the company reported $0.02 in earnings instead, which was enough to send shares rocketing higher, even though revenue missed estimates.
Going past the headline numbers, Ocwen reported a pretty solid all-around quarter. Just to run down a few of the highlights:
- Loan delinquencies decreased from 9.3% at the end of 2017 to 9%.
- The pre-payment rate decreased from 14.4% to 12.9%, most likely due to rising mortgage rates.
- Ocwen successfully modified nearly 11,600 mortgages during the quarter.
- GAAP stockholders' equity increased by 16% to $4.73 per share.
Ocwen's CEO has a very optimistic tone about the company's performance. "The first quarter of 2018 was an important one for Ocwen, and we accomplished a great deal," said CEO Ron Faris. Faris specifically cited the company's profitability, as well as its recent acquisition activity, and strong cash position.
Ocwen has experienced some significant challenges lately, particularly in its core mortgage servicing business, which, while profitable, saw revenue decline by more than 20% year over year. Even so, Ocwen produced a solid quarter and, more importantly, is taking steps to set itself up for growth.