Mr. Cooper Q1 Earnings Surpass Estimates, Revenues Decline Y/Y

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

MR. COOPER GROUP INC price-consensus-eps-surprise-chart | MR. COOPER GROUP INC Quote

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performances of Other Consumer Loan Providers

Capital One’s COF first-quarter 2025 adjusted earnings of $4.06 per share outpaced the Zacks Consensus Estimate of $3.66. Also, the figure reflected a jump of 26% from the prior-year quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

The primary drivers for COF’s solid performance were an improvement in net interest income and robust card spend in the latter part of the quarter. The decline in provisions was another major tailwind.

Ally Financial’s ALLY first-quarter 2025 adjusted earnings of 58 cents per share handily surpassed the Zacks Consensus Estimate of 43 cents. Also, the bottom line reflected a jump of 41.5% from the year-ago quarter.

ALLY's results benefited from a rise in net finance revenues and lower provisions. However, lower other revenues, higher non-interest expenses, and a decline in net finance receivables, and loans and deposits were the undermining factors.

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