Ocwen growth trickles down to Altisource gains
As subprime servicing giant Ocwen Financial Corp. (OCN) continues to grow through acquisition, its REO management vendor and former subsidiary Altisource (ASPS) is reaping the benefits. Ocwen returned to a profit of $20.2 million for the third quarter after finalizing its purchase of Litton Loan Services from Goldman Sachs (GS) and closing the acquisition of Saxon Mortgage Services from Morgan Stanley (MS). Altisource grew its book of business 42% during the three months ended Sept. 30. "Though Altisource continues to grow impressively on its existing book of business, we are more excited about recent acquisitions by Ocwen and the likelihood of coming acquisitions, as these have a direct and material impact on Altisource's business that is not fully accounted for in street numbers," according to a research note from financial services firm Stephens Inc. Analysts also revised their revenue estimate for Alitsource for the year to $404.9 million from $374.4. With Litton and Saxon mortgages coming on board next year, revenue at Altisource could climb as high as $506.9 million. Altisource earned $18.9 million in the third quarter, up 60% from one year ago. Altisource was spun off of Ocwen in August 2009 but the two maintain a close relationship. Ocwen decided to extend certain services to Altisource for an additional 12 months this fall in order to keep costs down. Write to Jon Prior. Follow him on Twitter @JonAPrior.