Rocket Companies Stock Fails To Launch Following Q2 Revenue, EPS Miss

Rocket Companies Inc RKT announced its second-quarter financial results after the close. Here's a rundown of the results.

What Happened: Rocket Companies reported second-quarter revenue of $1.392 billion, which was down from $2.668 billion year-over-year. The revenue number came in below average analyst estimates of $1.49 billion, according to data from Benzinga Pro.

Rocket Companies reported a quarterly adjusted earnings loss of 3 cents per share, which missed the estimate for positive earnings of 3 cents per share.

Rocket Mortgage generated $34.5 billion in mortgage origination closed loan volume during the second quarter. Gain on sale margin was 2.92%. 

The company said it exceeded its target expense reduction by $100 million, reducing expenses by $300 million quarter-over-quarter. Rocket Companies highlighted the strength of its liquidity position, with total liquidity of $7.3 billion, which includes $900 million of cash on-hand.

"In the second quarter alone, Rocket Companies introduced new lending programs, forged new mortgage partnerships, officially launched our solar business and expanded our brand deeper into Canada. These moves provide us immediate opportunities today, and a tremendous runway for growth and expansion well into the future," said Jay Farner, vice chairman and CEO of Rocket Companies.

What's Next: Rocket Companies said it expects third-quarter closed loan volume between $23 billion and $28 billion. The third-quarter net rate lock volume is expected to be between $23 billion and $30 billion. The gain on sale margins is expected to be in a range of 2.5% to 2.8%.

Rocket Companies said it will continue to focus on cost management in the back half of the year.

"We are also investing our capital into the Rocket engagement and services platforms to expand our client base, drive higher conversion, and lower our client acquisition cost, setting the foundation for our next stage of growth," said Julie Booth, CFO and treasurer of Rocket Companies.

RKT Price Action: Rocket Companies has a 52-week high of $15.26 and a 52-week low of $6.26.

The stock was down 12.8% in after-hours trading at $9, according to Benzinga Pro.

Photo: Erik Drost from Flickr.