On February 6, 2024, Rithm Capital Corp. (RITM) revealed its fourth-quarter 2023 results, sending its shares plummeting by 4.3%. The financial report was a mixed bag: while the company exceeded adjusted earnings per share estimates by a remarkable 45.7%, it also experienced a 7% year-over-year decline in revenues, falling short of the consensus projection by a significant 20%.
Rithm Capital Corp. Price, Consensus and EPS Surprise
Rithm Capital Corp. price-consensus-eps-surprise-chart | Rithm Capital Corp. Quote
Q4 Operations
During the fourth quarter of 2023, Rithm Capital witnessed a decline in net servicing revenues, and a lower-than-expected interest income. Total expenses also spiked by 19.7% year over year, contributing to a more than twofold decrease in pretax income and net loss.
Segmental Update
The company’s operations under the segments of Origination and Servicing, Investment Portfolio, Mortgage Loans Receivable, and Asset Management depicted varying performances during the quarter. Of note, the Acquisition Update and Full-Year Update also colored the narrative with strategic decisions and annual performance metrics.
Financial Update (as of Dec 31, 2023)
Rithm Capital ended the quarter with adjusted balances of cash and cash equivalents, total assets, debt, and total equity. The report indicated a mixed financial picture with areas for both concern and optimism.
Zacks Rank
Despite the downturn in share price, Rithm Capital currently carries a Zacks Rank #2 (Buy), indicating a degree of underlying strength within the company.
Other Finance Sector Releases
On the same vein, other finance sector releases such as The Travelers Companies (TRV) and The Progressive Corporation (PGR) showcased financial performances that stood in stark contrast to Rithm Capital’s tepid showing. Both companies demonstrated remarkable earnings growth, exceeding expectations in their respective quarters.
Insurance Giants Outshine Estimates with Impressive Q4 Performance
In a quarter rattled with economic uncertainty, The Progressive Corporation (PGR) stands out among industry peers, reporting a notable surge in net premiums written. PGR’s net premiums written spiked to $15.1 billion, indicating a remarkable 21% increase from the previous year’s $12.5 billion. The company’s stellar performance overshot analysts’ estimates of $14 billion, showcasing sound management and a robust business model. Net premiums earned followed the upward trajectory, soaring by 22% to $15.8 billion, exceeding the projected $14.8 billion.
Progressive’s Improved Performance
Attempting to tap into the industry vibe, Progressive displayed an impressive combined ratio, marking a significant 520 basis points (bps) improvement from the same quarter of the previous year, settling at a commendable 88.7.
W.R. Berkley’s Outstanding Growth
Meanwhile, W.R. Berkley Corporation’s fourth-quarter 2023 operating income surged to $1.45 per share, surpassing the Zacks Consensus Estimate by 7.4%. This exceptional performance represents a substantial 25% year-over-year improvement. With operating revenues escalating by 9.3% to $3.2 billion, driven by higher net premiums earned and enhanced net investment income, W.R. Berkley outperformed expectations by 1.3%. Notably, the company’s net premiums written ascended by 12% year over year, although it fell slightly short of the estimated $2.8 billion. Moreover, pre-tax underwriting income witnessed an 8.2% increase to $315.9 million. Impressively, the consolidated combined ratio remained unchanged year over year, resting at a healthy 88.4.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2023. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report
W.R. Berkley Corporation (WRB) : Free Stock Analysis Report
The Progressive Corporation (PGR) : Free Stock Analysis Report
Rithm Capital Corp. (RITM) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
