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What to Expect From PennyMac Financial (PFSI) in Q3 Earnings

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PennyMac Financial Services, Inc. (PFSI - Free Report) is scheduled to report third-quarter 2019 results on Oct 31, after market close. Its revenues and earnings for the quarter are expected to have risen on a year-over-year basis.

In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results reflected growth in revenues and higher expenses.

The company boasts an impressive earnings surprise history. Its earnings surpassed the consensus estimate in three of the trailing four quarters, the average beat being 7.3%.

PennyMac Financial Services, Inc. Price and EPS Surprise

Activities of the company in the third quarter encouraged analysts to revise earnings estimates upward. Thus, the Zacks Consensus Estimate for its earnings of $1.25 for the to-be-reported quarter has been revised upward over the past 30 days. Also, it indicates rise of 119.3% from the year-ago quarter’s reported figure.

 Key Factors

PennyMac’s top line is likely to have been positively impacted by increase in mortgage loan originations and refinancing activities in the third quarter on account of lower mortgage rates.

However, because of relatively lower interest rates, the company’s other investments portfolio’s interest income might have been negatively impacted. The consensus estimate for sales is pegged at $368.2 million, indicating growth of 46.7% from the year-ago quarter’s reported figure.

Moreover, as salaries and benefits costs continue to increase, overall expenses are expected to have risen in the third quarter. Also, the company’s efforts to expand into new markets and products might have led to higher expenses.

Earnings Whispers

According to our quantitative model PennyMac does not have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — to increase the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: PennyMac has an Earnings ESP of 0.00%.

Zacks Rank: The company currently carries a Zacks Rank #1 (Strong Buy).

Stocks That Warrant a Look

Here are some finance stocks that you may want to consider, as according to our model, these have the right combination of elements to post an earnings beat in their upcoming releases.

Cullen/Frost Bankers, Inc (CFR - Free Report) is slated to release results on Oct 31. It currently has an Earnings ESP of +0.07% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Banco Macro S.A. (BMA - Free Report) is set to release results on Nov 26. It has an Earnings ESP of +12.20% and a Zacks Rank #3 at present.

Fidelity National Information Services, Inc. (FIS - Free Report) is slated to release results on Nov 5. The company has an Earnings ESP of +0.13% and carries a Zacks Rank of 3.

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