Walter Investment Management (WAC) Posts Surprise Q1 Loss

Walter Investment Management (NYSE: WAC) reported Q1 EPS of ($0.50), $0.78 worse than the analyst estimate of $0.28. Revenue for the quarter came in at $66.8 million versus the consensus estimate of $305.95 million.

The Q1 revenue drop was driven by $196.6 million lower net servicing revenue and fees reflecting a $197.3 million change in fair value charges to mortgage servicing rights. Additionally, the current quarter reflects $40.8 million lower net gains on sales of loans primarily due to a lower volume of locked loans in the current quarter as compared to the prior year quarter. This was partially offset by a shift in mix from the lower margin correspondent channel to the higher margin consumer channel and $19.8 million lower interest income on loans driven by the sale of the residual interests in seven of the Residual Trusts. The quarter also includes $12.4 million in higher other income driven by higher fair value gains related to charged-off loans due to an improvement in collections expectations over time.

For earnings history and earnings-related data on Walter Investment Management (WAC) click here.

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