PennyMac Financial Services Q3 adjusted pretax profit beats estimates; expects mortgage demand to stay subdued
PFSI•PennyMac Financial Services reported third-quarter adjusted pretax profit of $132 million, beating the $124.38 million estimate, while net income fell sharply year over year to $29 million. The company expects mortgage demand to remain subdued and fourth-quarter adjusted ROE to stay near current levels.
1. Profit and outlook
PennyMac Financial Services' third-quarter adjusted pretax profit was $132 million, above the $124.38 million consensus estimate from five analysts. Net income was $29 million and fell sharply year over year. The company expects fourth-quarter adjusted return on equity to remain near current levels and mortgage demand to stay subdued because of higher interest rates.
2. Segments and costs
The servicing segment was profitable, offsetting weakness in production, which posted a pretax loss amid lower refinance volumes and a smaller, more competitive origination market. The company said it is implementing expense reductions and expects annualized operating expenses to decline by $160 million by the first quarter of 2027.
3. CFO appointment
Kevin Ryan, currently chief strategy officer, will become CFO on January 1. The company declared a quarterly dividend of $0.30.
