What happened
Shares of Rocket Companies (RKT 4.14%) jumped on Friday after the provider of real estate services released its second-quarter financial report. As of 3 p.m. EDT, Rocket's stock price was up more than 10%.
So what
Rocket's adjusted revenue fell 47% year over year to $2.8 billion. That led to a 68% decline in adjusted net income to $920 million.
Investors bid up shares of Rocket Companies on Friday. Image source: Getty Images.
Low interest rates helped to fuel a sharp increase in mortgage refinancing activity last year. At the same time, many of Rocket's rivals were unable to effectively compete for business due to coronavirus-related challenges. Rocket's revenue and earnings, in turn, soared in the year-ago period.
To account for this, Rocket's management prefers to view its results in relation to 2019's metrics. Viewed this way, the company's longer-term growth trajectory becomes more apparent. Rocket's adjusted revenue and net income were up 110% and 252%, respectively, compared to the second quarter of 2019.
Now what
Management anticipates closed loan volume of $82 billion to $87 billion in the third quarter. Despite the tough comparisons with last year's strong performance, CEO Jay Farner said Rocket was on track to deliver even higher mortgage volumes in 2021.
"Our record purchase mortgage volume puts us well on the path to our goal of becoming the largest retail home purchase lender in the nation by the end of 2023," Farner said. "That strong momentum will carry us into the second half of the year, as we expect our 2021 mortgage origination closed loan volume to exceed 2020's record performance of $320 billion."
