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.