SAN DIEGO - Guild Holdings Company (NYSE:GHLD), a growth-oriented mortgage company, reported a fourth-quarter earnings per share (EPS) of $0.20, which surpassed the analyst consensus by $0.06. However, the company's revenue for the quarter was $57.2 million, falling significantly short of the consensus estimate of $166.22 million.
Following the announcement, the stock witnessed a substantial 9.72% drop.
The company's fourth-quarter results revealed a net loss of $93.1 million, a stark contrast to the net income of $54.2 million reported in the previous quarter. The total in-house originations for the quarter stood at $3.5 billion, a decrease from $4.3 billion in the prior quarter. The net revenue plummeted by 78% from the previous quarter's $257.3 million.
Guild Holdings' CEO Terry Schmidt commented on the results, highlighting the company's focus on the purchase market and the strength of its platform in growing market share. Schmidt also pointed to the recent acquisition of Academy Mortgage, which has positioned Guild as the 8th largest non-bank retail mortgage lender, contributing to a 25% increase in origination volume based on third-quarter results.
Despite the challenges faced in the fourth quarter, Guild Holdings managed to grow its servicing portfolio unpaid principal balance by 2% to $85.0 billion as of December 31, 2023, compared to $83.7 billion as of September 30, 2023. The company also reported an adjusted net income of $12.5 million for the quarter, albeit a decrease from $29.0 million in the previous quarter.
Looking at the full year, Guild Holdings' total in-house originations were $15.0 billion, down from $19.1 billion in the previous year. The net revenue for the full year was $0.7 billion, a decrease from $1.2 billion in the prior year, and the company reported a net loss of $39.1 million for 2023, compared to a net income of $328.6 million in the previous year.
The company's adjusted return on equity was 3.9% for 2023, which is a decrease from the 6.4% reported in the prior year. The results reflect the impact of a challenging environment characterized by low housing supply, purchase seasonality, and prolonged higher interest rates.
Guild Holdings' focus remains on maintaining a robust capital position, pursuing complementary acquisitions, and positioning for growth when the cycle turns, as stated by CEO Schmidt. The company has extended its share repurchase program, reinforcing its commitment to creating value for shareholders over time.
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