Nationstar Mortgage Holdings in Dallas reported a $132.4 million loss for the first quarter of 2016, showcasing once more the toll falling interest rates have taken on companies across the mortgage industry.
Adjusted earnings per share were $28 million, or 27 cents per share and still six cents below the average estimate of analysts polled by Bloomberg.
"Overall, not a banner quarter, but relative to the larger cost structure problems at other special servicers, [Nationstar] looks OK," Compass Point Research & Trading analyst Fred Small wrote in a note Wednesday following the earnings release.
Last year, Nationstar's GAAP net loss was $48.3 million.
Devouring the company's profits was a $253 million charge for mark-to-market adjustments, including adjustments to the fair value of the company's mortgage servicing rights portfolio.
Without the interest-rate-related charge and other nonrecurring expenses, the company's servicing segment would have reported pretax income of $49.3 million. Instead, the segment recorded a $207.8 million loss versus a $105.8 million net loss a year ago. This year's loss was mitigated in part by a higher net gain on mortgage loans held for sale and a smaller loss from other income including interest income.
The origination segment posted net income of $39.8 million for the quarter, down 33% from a year ago due to higher expenses.
The Xome segment, formerly known as Solutionstar, also reported a drop in net income from last year, falling 64% to $11.4 million. Higher expenses and a drop in service-related revenue were to blame.
