UWMC - UWM Holdings stock gains after Q1 earnings beat even as loan originations fall

UWM Holdings ( NYSE: UWMC ) managed to deliver a Q1 earnings earnings beat even as mortgage originations declined from the previous quarter and the year-ago period with the increase in rising interest rates. UWMC stock rose 1.7% in Tuesday premarket trading.

The parent of United Wholesale Mortgage expects Q3 production of $23B-$28B, trailing the Visible Alpha consensus of $31.4B, and gain margin of 30-60 basis points vs. 85 bp consensus.

Q2 originations of $29.9B compares with Visible Alpha consensus of $30.3B and declined from $38.8B in Q1 and from $59.2B in the year-ago quarter. Gain margin of 99 bp, vs. 81 bp Visible Alpha consensus, was unchanged from Q1 and increased from 81 bp in the year-ago quarter.

Purchase originations were $22.4B in the quarter, a 7% decrease from Q1 and a 17% increase from Q2 2021.

Mortgage servicing rights unpaid principal balance of $308.1B increased from $303.4B in the prior quarter; weighted average interest rate rose to 3.19% from 3.04% in Q1.

Meanwhile, UWM Holdings ( UWMC ) said its latest underwriting technology BOLT, launched in Q3 2021, saw adoption increase from Q1 2022 to Q2 2022, helping to cut the application to clear-to-close time on conventional loans by ~4 business days. At the same time, underwriting efficiency improved.

Q2 adjusted net income of $165.3M vs. $349.4M in Q1 and $107.1M in Q2 2021.

Q2 net revenue of $564.3M vs. $499.8M consensus, declined from $821.8M in the prior quarter and increased from $484.7M in the year-ago period.

Total expenses fell to $348.0M from $364.5M in the previous quarter and rose from $344.5M in Q2 2021.

Q2 adjusted EPS of $0.10, topped the $0.05 consensus, dropped from $0.22 GAAP EPS in Q1 and increased from GAAP EPS of $0.07 in the year-ago period.

Conference call at 10:00 AM ET.

Earlier, UWM Holdings ( UWMC ) non-GAAP EPS of $0.10 beats by $0.05, revenue of $564.23M beats by $64.45M

For further details see: