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Mr. Cooper Group Inc. COOP reported first-quarter 2025 adjusted earnings per share of $2.97, which beat the Zacks Consensus Estimate by 5.7%. The bottom line rose 30.3% year over year.
Solid improvements in the Servicing and Originations segments were major tailwinds for the company in the fourth quarter. However, a decline in revenues and an increase in expenses were spoilsports.
Net income of $88 million in the first quarter declined significantly from $181 million a year ago.
COOP’s Revenues & Expenses
Mr. Cooper's first-quarter total revenues declined 0.7% year over year to $560 million. The top line missed the consensus mark by 8.6%.
Total expenses of $430 million grew 35.6% year over year.
Interest income of $189 million jumped 19.6% year over year. Interest expenses increased 25.3% year over year to $213 million in the quarter under review.
Mr. Cooper's Segmental Performance
The Servicing segment reported a pre-tax operating income of $332 million, which rose 21.6% year over year in the first quarter due to portfolio growth and strong operating leverage. Total revenues of $403 million fell 10.4% from a year ago. The servicing portfolio increased 33.3% year over year, surpassing the $1.51-trillion mark.
The Originations segment’s pre-tax operating income of $53 million increased 65.6% from a year ago. Total revenues of $140 million in the first quarter rose 52.2% from a year ago. The recapture percentage was 19%, down from 24% a year ago. Funded volume of $8.3 billion increased from the year-ago figure of $2.9 billion.
COOP's Financial Position (As of March 31, 2025)
Mr. Cooper exited the first quarter of 2025 with total assets of $18.4 billion, lower than $18.9 billion at the end of the fourth quarter of 2024. Cash and cash equivalents amounted to $784 million, higher than $753 million at the end of the previous quarter.
Net unsecured senior notes were $4.9 billion, marginally up from the previous quarter. Total liabilities of $13.6 billion at the first-quarter end were lower than $14.1 billion at the end of the fourth quarter of 2024. Total shareholders’ equity rose from $4.8 billion in the previous quarter to $4.9 billion in the first quarter.
Our View on Mr. Cooper
COOP ended the first 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