PennyMac Mortgage Investment Trust (PMT) is a REIT that invests primarily in residential mortgage loans and mortgage-related assets. The company is an externally managed by PNMAC Capital Management, an investment adviser.
The company invests in residential mortgage-related opportunities including mortgage loans, mortgage servicing rights and mortgage-backed securities. It invests in both newly originated prime mortgage loans and distressed mortgage loans.
Disappointing Fourth Quarter Results
The company reported its Q4 results in February. Net income for the quarter was $26.5 million, down 52% from the prior quarter.
Net investment income was $53.1million, down 50% from the prior quarter. ROE declined to 7% from 14% in the prior quarter.
The company reports results through two segments– Investment Activities and Correspondent. Investment Activities segment suffered due to the impact of lower current and expected home prices and a seasonal slowdown in loans.
The Correspondent Production segment also had to struggle due to highly competitive correspondent market for newly originated conventional conforming loans.
Due to disappointing results, quarterly and annual estimates have been revised sharply downwards in the past few weeks by analysts.
Zacks Consensus Estimates for the current and next fiscal year now stand at $2.58 per share and $2.73 per share, from $2.78 per share and $3.10 per share, before the results.