Rocket Companies Q1 earnings miss as rates climb, stifling loan demand (NYSE: RKT)

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Rocket Companies (NYSE: RKT) the stock is 1.1% slip Tuesday after-hours trading after the the company’s first-quarter results fell short of Wall Street expectations as higher interest rates dampen demand for loans.

The online lender expects second-quarter closed loan volume of $35 billion to $40 billion, net rate lock volume of $31 billion to $38 billion and gain on selling margins of $2 .60% to 2.90%. By comparison, Q4 closed loan origination volume was $54.0 billion, net rate lock volume was $49.6 billion, and gain margin on sale was 3.01% .

Adjusted EPS of $0.15 in the first quarter was below the consensus of $0.19, falling from $0.32 in the fourth quarter and from $0.91 in the year-ago quarter.

First quarter adjusted revenue of $1.93 billion, lagging the consensus of $2.24 billion, fell from $2.44 billion in the fourth quarter of 2021 and from $4.04 billion in the first quarter 2021.

“Rocket (RKT) delivered a strong performance in the first quarter and achieved our best volume of refinance purchases and disbursements in the first quarter, even as rates rose rapidly,” said Jay Farner, vice president and CEO. .

Rocket (RKT) Mortgage Generated $54.0 Billion in Closed Mortgage Volume vs. $75.9 Billion in Q4; Gain on sales margin of 3.01%, improving from 2.80% in Q4.

Total spend of $1.61B vs. $1.74B in Q4.

Conference call at 4:30 p.m. ET.

Earlier, Rocket Companies (RKT) non-GAAP EPS $0.15 misses $0.04, adj. revenue of $1.93 billion missed by $310 million

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