Mr. Cooper Group Inc. COOP reported fourth-quarter 2024 adjusted earnings per share of $2.73, which beat the Zacks Consensus Estimate by 5.8%. The bottom line rose 59.6% year over year.

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Solid improvements in the Servicing and Originations segments were major tailwinds for the company in the fourth quarter. The servicing portfolio increased year over year, surpassing the $1.56-trillion mark. However, a decline in revenues and an increase in expenses were spoilsports.

Net income of $204 million in the fourth quarter increased significantly from $46 million a year ago.

For 2024, adjusted earnings per share were $10.19, which beat the Zacks Consensus Estimate of $10.18. The metric rose from $7.30 in 2023. Net income of $669 million rose 33.8% from 2023 reported figure.

COOP’s Revenues & Expenses

Mr. Cooper's fourth-quarter total revenues declined 49.5% year over year to $654 million. The top line missed the consensus mark by 11.6%.

For the full year, total revenues were $2.22 billion, which topped the Zacks Consensus Estimate of $2.18 billion. The metric rose 89.8% from 2023.

Total expenses of $367 million grew 10.5% year over year.

Interest income of $216 million jumped 35.8% year over year. Interest expenses increased 38.4% year over year to $220 million in the quarter under review.

Mr. Cooper's Segmental Performance

The Servicing segment reported a pre-tax operating income of $318 million, which rose 38.9% year over year in the fourth quarter due to portfolio growth and strong operating leverage. Total revenues of $502 million grew 58.9% from a year ago. The servicing portfolio increased 57% year over year, surpassing the $1.56-trillion mark.

The Originations segment’s pre-tax operating income of $47 million increased significantly from $10 million a year ago. Total revenues of $135 million in the fourth quarter rose from $67 million a year ago. The recapture percentage was 21%, down from 22% a year ago. Funded volume of $9.3 billion increased from the year-ago figure of $2.7 billion.

COOP's Financial Position (As of Dec. 31, 2024)

Mr. Cooper exited the fourth quarter with total assets of $18.9 billion, higher than $16.2 billion at the end of the third quarter of 2024. Cash and cash equivalents amounted to $753 million, higher than $733 million at the end of the previous quarter.

Net unsecured senior notes were at $4.9 billion, marginally up from the previous quarter’s $4.8 billion. Total liabilities of $14.1 billion at the fourth-quarter end were higher than $11.5 billion at the end of third-quarter 2024. Total shareholders’ equity rose from $16.2 billion in the previous quarter to $18.9 billion in the fourth quarter.

Mr. Cooper’s Capital Deployment Update

The company bought back 0.4 million shares for $38 million in the quarter under review.

Our View on COOP

Mr. Cooper ended the fourth quarter on a strong note, with a strong performance in the Originations and Servicing segment. A solid balance sheet position is an added advantage. The company’s strong operations, rising profits and shareholder-value-boosting efforts are likely to support its financials in the upcoming period.

MR. COOPER GROUP INC Price, Consensus and EPS Surprise

MR. COOPER GROUP INC price-consensus-eps-surprise-chart | MR. COOPER GROUP INC Quote

The company currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performances of Other Consumer Loan Providers

Capital One’s COF fourth-quarter 2024 adjusted earnings of $3.09 per share handily surpassed the Zacks Consensus Estimate of $2.66. The bottom line also compared favorably with $2.24 in the prior-year quarter.

COF’s results gained from higher net interest income and non-interest income, and increased loans and deposits. Also, provisions declined in the quarter. However, a rise in expenses was an undermining factor.

Navient Corporation NAVI reported fourth-quarter 2024 adjusted earnings per share of 25 cents, surpassing the Zacks Consensus Estimate of 20 cents. It recorded earnings of 70 cents in the prior-year quarter.

Results were driven by a rise in other income and lower expenses. A decline in provision for loan losses was another positive. However, a decrease in net interest income was a headwind.

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