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Rocket Companies Report Down Earnings, But Issue Special Dividend

Doug Page
Feb 24, 2022
Rocket Companies New Logo.

2021 annual revenue down $2.7 billion from 2020.

Detroit-based Rocket Companies (RKT – NYSE) today reported $12.9 billion in revenue in 2021, down from $15.65 billion from the previous year, while net income was just over $6 billion in 2021, down from $9.4 billion in 2020.

The same was true for fourth-quarter results, with Rocket reporting $2.6 billion in quarterly revenue in 2021, down from $4.7 billion in revenue in 2020’s fourth quarter. 2021’s quarterly net income was $865 million, down from $2.8 billion in net income in the previous year’s fourth quarter.

Despite the down year, Rocket announced it would issue a special $1.01 dividend per share payable on March 22, which will cost the company $2 billion, according to Rocket. Last year, said Chief Financial Officer and Treasurer Julie Booth, Rocket issued a special dividend of $1.11 a share.

The company also announced it would spend $300 million in repurchasing its shares.

In afterhours trading, the company’s stock was down 11 cents to $11.45. The company’s stock trades on the New York Stock Exchange. It was recently downgraded by Bank of America analyst Mihir Bhatia. He revised his target price to $11 a share.

“Rocket Mortgage had its best year in overall (loan) origination, with $351 billion in originations, while also setting a new record in home purchase volume,” said CEO Jay Farner, noting their December 2021 acquisition of Truebill will become a significant asset for the company.

“Truebill is incredibly important. Our clients can be seven to eight to nine months out from buying a home,” Farner said. “They can engage with Truebill to increase their credit score, review their monthly bills and save money.”

According to the news release Rocket Companies issued announcing the acquisition, Truebill came to the Rocket Company fold with 2.5 million clients.

“It contributes incremental revenue of more than $100 million,” Booth said on Thursday.

When asked if increasing interest rates would hurt Rocket, Farner said, “We’re fortunate mortgage rates don’t sit by themselves. They sit with other vehicles, like credit cards, a personal loan, a home equity loan. Even if we see an increase in interest rates, with the tax deduction, a mortgage is still the best way for our clients to achieve their goals.”

“The driver is achieving what they want whether it’s a new home or a new kitchen,” he added. “That’s where the confidence in our company comes through. We have an advantage.”

He also noted that compared to where mortgage rates were in 1981 — when the average rate was in excess of 16%, according to Freddie Mac — today’s mortgage rates, hovering at 4%, are quite low.

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