Shares of the real estate brokerage and title and escrow company Realogy Holdings (NYSE:RLGY) rose more than 15% as of 10:45 a.m. EDT Thursday, after the company announced earnings results for the first quarter of the year.
Realogy, which franchises brokerage brands such as Century 21, Coldwell Banker, and Sotheby's International Realty, reported a $33 million profit, or basic earnings per share (EPS) of $0.28 on total revenue of $1.55 billion.
Profits blew past analysts' earnings estimates, and revenue also beat slightly as well.
Combined closed transaction volume in the first quarter increased 44% year over year, which was well above the 28% year-over-year market volume growth reported by the National Association of Realtors.
"We are off to a phenomenal start to 2021, delivering the strongest first quarter top and bottom line results in Realogy's history," CFO Charlotte Simonelli said in a statement.
The earnings beat resulted in a pretty big surprise, which is why the stock is doing well.
Realogy also showed good transaction volume growth even as mortgage rates have come up. Usually when mortgage rates rise, transactions slow because the cost of borrowing becomes more expensive.
So the earnings surprise is a welcome sign, perhaps meaning there could be pent-up demand and that the real estate boom is not over. But I also still worry that rising mortgage rates could still slow the real estate market later this year, which would not be good for the company.