Mr. Cooper Group Inc. (COOP) stock plummeted 5.43% in the pre-market session on Wednesday, despite reporting strong fourth-quarter results driven by robust growth in its servicing portfolio and originations business.
The mortgage service provider reported net income of $204 million for the fourth quarter, up significantly from $80 million in the previous quarter. Earnings per share came in at $3.13, beating analysts' estimates of $2.58.
The company's servicing portfolio grew 57% year-over-year to $1,556 billion, driven by the acquisition of Flagstar's mortgage operations. Meanwhile, the originations segment funded 32,954 loans totaling $9.3 billion in unpaid principal balance (UPB), representing a 36% quarter-over-quarter increase.
However, the company's robust performance was overshadowed by concerns over slowing growth in the housing market and the potential impact on its future earnings. Analysts have cautioned that the company's growth may face challenges in the coming quarters as rising interest rates and economic uncertainty weigh on the mortgage market.
Despite the stock's sharp decline, Mr. Cooper Group's management remains optimistic about the company's prospects, citing its strong capital position, liquidity, and diversified business model as key strengths to navigate the challenging environment.
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