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Low earnings dent PennyMac, Redwood Trust stocks on HW 30

Stock chart

Less-than-satisfactory earnings from PennyMac Mortgage Investment Trust (PMT) and Redwood Trust (RWT) helped cause both the investment firms to tank on the HW 30 Wednesday.

PennyMac reported a net income of $39.7 million, or 57 cents per diluted share, for the third quarter of 2013, down 27% from the prior quarter. 

“Higher mortgage rates in the third quarter drove a significant contraction in the mortgage origination market, which led to lower lock volume and reduced margins in PMT's correspondent lending business,” said Chairman and CEO Stanford Kurland.

“However, our distressed whole loan portfolio continued to perform well, and we made significant new investments, deploying capital from the third quarter equity raise,” he added.

Meanwhile, the tumble in PennyMac’s earnings can be seen in its stock, which fell 1%, and is down 7.62% year-to-date.  

On the other hand, Redwood Trust’s third-quarter net earnings also dipped, to $22 million, or 25 cents per fully diluted share, compared to $40 million, or 48 cents per fully diluted share, for the third quarter of 2012.

In addition, Redwood’s stock dropped .45% on Wednesday, but is up nearly 12% year-to-date.  

Comparatively, the other three investment firms on the HW 30 increased after posting slight dips on Tuesday.

Annaly Capital Management (NLY) grew .32%, but is down roughly 27% year-to-date.

Furthermore, American Capital Agency Corp. (AGNC) escalated .32%, but is down almost 33% year-to-date.

Two Harbors Investment (TWO) soared 2.75%, and is down nearly 19% year-to-date.

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