Mr. Cooper Q2 Earnings & Revenues Miss, Expenses Rise Y/Y

Mr. Cooper Group Inc. COOP reported second-quarter 2025 adjusted earnings per share of $3.13, which missed the Zacks Consensus Estimate by 6%. However, the bottom line rose 24.2% year over year.

The increase in expenses was the major headwind for the company in the second quarter. However, improvements in the Servicing and Originations segments provided partial support.

Net income of $198 million in the second quarter declined 2.9% from $204 million a year ago.

COOP’s Revenues & Expenses

Mr. Cooper's second-quarter total revenues rose 4.3% year over year to $608 million. However, the top line missed the consensus mark by 13.6%.

Total expenses of $330 million grew 10% year over year.

Interest income of $217 million jumped 14.8% year over year. Interest expenses increased 16% year over year to $217 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 15.3% year over year in the second quarter due to portfolio growth and strong operating leverage. Total revenues of $434 million fell 4.8% from a year ago. The servicing portfolio increased 25.1% year over year, surpassing the $1.51-trillion mark.

The Originations segment’s pre-tax operating income of $64 million increased 68.4% from a year ago. Total revenues of $158 million in the second quarter rose 47.7% from a year ago. The recapture percentage was 17%, down from 22% a year ago. Funded volume of $9.4 billion increased from the year-ago figure of $3.7 billion.

COOP's Financial Position (As of June 30, 2025)

Mr. Cooper exited the second quarter of 2025 with total assets of $18.5 billion, slightly higher than $18.4 billion at the end of the first quarter of 2025. Cash and cash equivalents amounted to $783 million, slightly lower than $784 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 $13.4 billion at the second-quarter end were lower than $13.6 billion at the end of the first quarter of 2025. Total shareholders’ equity rose from $4.9 billion in the previous quarter to $5.1 billion in the second quarter.

Our View on Mr. Cooper

COOP ended the second quarter on a weaker note, with net income declining and expenses rising. Nonetheless, continued strength in the Originations and Servicing segments, along with a solid balance sheet, offers support and are likely to improve 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.

Performance of Other Consumer Loan Providers

Capital One’s COF second-quarter 2025 adjusted earnings of $5.48 per share widely surpassed the Zacks Consensus Estimate of $3.83. The bottom line also compared favorably with $4.06 in the prior quarter.

COF’s results benefited from higher NII and non-interest income. Also, loans and deposits improved in the quarter. However, the increase in expenses and jump in provisions were undermining factors.

Ally Financial’s ALLY second-quarter 2025 adjusted earnings of 99 cents per share surpassed the Zacks Consensus Estimate of 78 cents. Further, the bottom line reflected a jump of 35.6% from the year-ago quarter.

ALLY's results benefited from a rise in net finance revenues and other revenues. Further, lower non-interest expenses and reduced provision provided support. However, a decline in net finance receivables and loans, and deposits was the undermining factor.

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This article originally published on Zacks Investment Research (zacks.com).

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