Yahoo Finance Rithm Capital (RITM) to Post Q4 Earnings: What to Expect
Rithm Capital Corp. RITM is set to report its fourth-quarter 2022 results on Feb 8, before the opening bell.
In the last reported quarter, the leading capital provider reported adjusted operating earnings per share of 32 cents, beating the Zacks Consensus Estimate by 28% due to higher servicing fees and interest income, and manageable costs. Also, its credit performance metrics were strong during the quarter.
Earnings Surprise History
Rithm Capital’s earnings beat the consensus estimate in all the prior four quarters, with the average being 12.3%. This is depicted in the graph below:
Rithm Capital Corp. Price and EPS Surprise
Rithm Capital Corp. price-eps-surprise | Rithm Capital Corp. Quote
Let’s see how things have shaped up prior to the fourth-quarter earnings announcement.
Factors to Note
The Zacks Consensus Estimate for fourth-quarter interest income indicates 24.4% year-over-year growth. While the increased interest rate environment is expected to have helped Rithm Capital generate higher returns from some of its investments and consumer loans, its interest rate hedging arrangements are likely to have protected it from growing interest expenses.
Also, increased fees and its Caliber acquisition are expected to have supported its revenues. These are likely to have positioned the company for massive revenue growth. The consensus estimate for Rithm Capital’s fourth-quarter revenues of $690.7 million indicates a significant rise from the year-ago reported figure of $217.6 million.
However, the Zacks Consensus Estimate for net gain on originated residential mortgage loans, held-for-sale, indicates a 66% year-over-year decline for the fourth quarter. Moreover, the consensus mark for fourth-quarter net servicing revenues indicates a 27% decline from the prior-year figure.
The rising inflation level is also expected to have led to higher expenses for RITM, likely affecting its profits in the fourth quarter. This is expected to have led to a year-over-year decline in earnings and made an earnings beat uncertain.
The Zacks Consensus Estimate for fourth-quarter earnings per share of 29 cents has witnessed no movement in the past week. The estimated figure projects a decrease of 27.5% from the prior-year reported number.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Rithm Capital this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of 0.00%. The Most Accurate Estimate is currently pegged at 29 cents per share, in line with the Zacks Consensus Estimate.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Rithm Capital currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for Rithm Capital, here are some companies in the broader Finance space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
Ares Capital Corporation ARCC has an Earnings ESP of +8.29% and is a Zacks #2 Ranked player. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Ares Capital’s bottom line for the to-be-reported quarter is pegged at 56 cents per share, implying a 7.7% improvement from the year-ago figure. ARCC beat earnings estimates in two of the past four quarters, met once and missed on the other occasion, with an average surprise of 3%.
Manulife Financial Corporation MFC has an Earnings ESP of +2.20% and a Zacks Rank of 2.
The Zacks Consensus Estimate for Manulife Financial’s bottom line for the to-be-reported quarter is pegged at 61 cents per share, which witnessed two upward estimate revisions in the past 30 days against no downward movement. MFC beat earnings estimates in two of the past four quarters and missed twice.
SBA Communications Corporation SBAC has an Earnings ESP of +0.19% and a Zacks Rank of 3.
The Zacks Consensus Estimate for SBA Communications’ bottom line for the to-be-reported quarter is pegged at $3.13 per share, which indicates 11.4% year-over-year growth. SBAC beat earnings estimates in all the past four quarters, with an average surprise of 2.1%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Ares Capital Corporation (ARCC) : Free Stock Analysis Report
Manulife Financial Corp (MFC) : Free Stock Analysis Report
SBA Communications Corporation (SBAC) : Free Stock Analysis Report
Rithm Capital Corp. (RITM) : Free Stock Analysis Report
