NEW YORK (
Walter Investment Management Corp.
(WAC - Get Report) shares were among the best performing financial sector stocks Thursday following first quarter earnings results that handily topped analyst estimates.
Shares were higher by 17.44% to $29.16 with slightly more than an hour of trading left on the day.
The mortgage servicer posted core earnings of $58 million or $1.53 per share vs. a consensus estimate of $0.96. That is down slightly from the first quarter of last year, when Walter earned $58.9 million, or $1.57 per diluted share.
"Given the operating environment, we look very favorably on these results," stated a report from Oppenheimer analyst Ben Chittenden. The analyst was pleased Walter was able to complete acquisitions of mortgage servicing rights even though regulators have stepped up scrutiny of nonbank servicers such as Walter, Nationstar Mortgage
(NSM - Get Report) and Ocwen Financial
(OCN), run by mortgage servicing pioneer Bill Erbey. These companies have grown rapidly in the wake of the mortgage crisis as big banks like Bank of America
(C) and JPMorgan Chase
(JPM) have cut back on mortgage servicing, which includes collecting debt payments on mortgages on behalf of bondholders, among other tasks, in exchange for a fee.
Oppenheimer's Chittenden was also pleased that "conversations with potential clients regarding transactions have been accelerating," and that the company maintained 2014 "core" earnings guidance.