Dan Gilbert's Rocket Companies returned to profitability in the first quarter 2024
Dan Gilbert's Rocket Companies swung back to profitability in the first quarter after a tough fall and winter.
The Detroit-based parent company of Rocket Mortgage on Thursday reported a net income, or profit, of $291 million in the quarter on $1.38 billion in revenue, an improvement from its $233 million net loss the previous quarter on $694 million in revenue.
Rocket's closely watched "gain on sale" margins, or profit margins, was 3.1%, up from 2.68% in the previous quarter.
“Our rocket blasted off as we entered the new year," Rocket Companies CEO Varun Krishna said in a late afternoon earnings call.
Krishna said Rocket also grew its market share in the first quarter for home purchase loans as well as loan refinancings. In particular, he said, Rocket took that market share away from "large industry players and big banks."
"We believe we can, and will, continue to grow market share in both purchase and refinance, and drive consolidation in this fragmented, winner-takes-all market," said Krishna, who started as CEO in September.
Rocket Companies is the publicly traded corporate parent for multiple Gilbert businesses, the biggest being Rocket Mortgage, the nation's No. 2 mortgage lender by volume behind Pontiac-based United Wholesale Mortgage.
The mortgage industry has been struggling lately and Rocket had its first full-year loss in 2023 since going public, a $390 million net loss on $3.8 billion in revenue.
Like other mortgage lenders, Rocket has seen a drop in business since early 2022 when mortgage rates began rising from what had been historic lows, leading to fewer home purchases and less refinancing activity.
“We have a fortress balance sheet that gives us the flexibility to not only survive, but to thrive, through the inevitable ups and downs of the market," Krishna said. "While others are vying for survival, we are strategically investing in top tier talent, cutting edge technology and the enhancement of our brand to build a durable and growing business for the long term."
The Mortgage Bankers Association anticipates 2024 will be slightly better for the mortgage industry overall than last year, with $1.8 trillion in expected mortgage originations compared with $1.6 trillion in 2023.
More: Dan Gilbert's businesses shed thousands more jobs
Contact JC Reindl: 313-378-5460 or jcreindl@freepress.com. Follow him on X @jcreindl.
This article originally appeared on Detroit Free Press: Gilbert's Rocket Companies is back to profitability
