UWM Holdings Corp (UWMC) Q1 2024 Earnings: Surpasses Analyst Net Income Expectations

GuruFocus Research

May 10, 2024 at 2:25 p.m.·4 min read

Net Income: $180.5M in Q1 2024, a significant recovery from a net loss of $461M in Q4 2023 and $138.6M in Q1 2023, surpassing the estimate of $125.08M.
Earnings Per Share (EPS): Reported at $0.09, slightly ~~above~~ below the estimated $0.08.
Loan Origination Volume: Reached $27.6B, marking an increase from $24.4B in Q4 2023 and $22.3B in Q1 2023.
Purchase Volume: Set a new first-quarter record at $22.1B, up from $20.7B in Q4 2023 and $19.2B in Q1 2023.
Total Gain Margin: Improved to 108 basis points in Q1 2024 from 92 basis points in both Q4 2023 and Q1 2023.
Total Equity: Maintained at $2.5B as of March 31, 2024, consistent with December 31, 2023, but down from $2.9B on March 31, 2023.
Unpaid Principal Balance of MSRs: Stood at $229.7B with a weighted average coupon (WAC) of 4.58% at the end of Q1 2024, compared to $299.5B with a WAC of 4.43% at the end of 2023.

Warning! GuruFocus has detected 5 Warning Signs with UWMC.

On May 9, 2024, UWM Holdings Corp (NYSE:UWMC), a leader in the residential mortgage loan origination and servicing sector, released its 8-K filing detailing the financial results for the first quarter ended March 31, 2024. The company reported a significant turnaround with a net income of $180.5 million, a substantial recovery from previous losses and well above the analyst's estimate of $125.08 million. This performance is highlighted by a record first-quarter purchase volume of $22.1 billion and total loan origination volume reaching $27.6 billion.

Company Overview

UWM Holdings Corp, operating through its subsidiary United Wholesale Mortgage (UWM), is primarily engaged in the origination, sale, and servicing of residential mortgage loans. UWM supports independent mortgage advisors across all states and the District of Columbia, focusing on fostering strong broker relationships and enhancing residential mortgage lending experiences.

Financial Performance Insights

The first quarter of 2024 saw UWM Holdings Corp not only reverse its prior losses but also set new records in its operational metrics. The company's total loan origination volume was $27.6 billion, up from $22.3 billion in the same quarter the previous year. This includes an unprecedented $22.1 billion in purchase originations, underscoring UWM's strong position in the mortgage market despite challenges such as higher interest rates and inventory constraints.

The company's earnings per share (EPS) for the quarter stood at $0.09, aligning closely with analyst expectations of $0.08 per share. This marks a significant improvement over the EPS losses reported in the same quarter of the previous year. The total gain margin also improved to 108 basis points, up from 92 basis points year-over-year, reflecting better profitability in loan origination.

Balance Sheet and Liquidity

As of March 31, 2024, UWM Holdings reported total equity of $2.5 billion, consistent with the end of 2023, and a slight decrease from $2.9 billion a year ago. The company ended the quarter with approximately $2.9 billion in available liquidity, including $605.6 million in cash. This strong liquidity position supports UWM's ongoing operations and strategic initiatives.

Strategic Initiatives and Market Position

UWM's strategic initiatives such as the Mortgage Matchup and Refi 100 programs have been pivotal in enhancing broker capabilities and addressing market needs. The company's focus on technology and service delivery continues to strengthen its market position as a preferred partner for independent mortgage brokers.

Looking ahead, UWM anticipates second-quarter loan production to be between $28 billion and $35 billion, with gain margins ranging from 85 to 110 basis points. The company also continues its commitment to shareholder returns, declaring a quarterly cash dividend of $0.10 per share, marking the fourteenth consecutive quarter of such distributions.

Conclusion

The first quarter of 2024 has been markedly successful for UWM Holdings Corp, reflecting robust growth in core operational areas and a strong rebound in financial performance. With strategic initiatives in place and a solid liquidity position, UWM is well-prepared to navigate the ongoing complexities of the mortgage market, aiming to sustain growth and profitability in upcoming quarters.

For detailed financial figures and future projections, interested parties can access the full earnings call and supplementary materials on UWM's investor relations website.

Explore the complete 8-K earnings release (here) from UWM Holdings Corp for further details.

This article first appeared on GuruFocus.

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