UWM Holdings Corporation (UWMC) shares surged 8.11% in after-hours trading on Tuesday, despite reporting disappointing first-quarter results for 2025. The unexpected rally appears to be driven by the company's optimistic outlook for the second quarter, overshadowing the earnings miss.

For the first quarter ended March 31, UWM Holdings reported a net loss of $247.028 million, with earnings per share (EPS) of -$0.12. This figure fell significantly short of analysts' expectations, as the mean estimate of ten analysts was for earnings of $0.05 per share. The company's adjusted net income stood at -$195.3 million, far below the IBES estimate of $76.6 million. Despite the disappointing bottom line, UWM Holdings saw its revenue rise by 7.6% to $613.37 million, surpassing the analysts' expectations of $557.19 million.

The market's positive reaction seems to stem from UWM Holdings' forward-looking guidance. The company projects second-quarter production to be in the range of $38 to $45 billion, with gain margins expected between 90 to 115 basis points. This optimistic forecast suggests that UWM Holdings anticipates a significant improvement in its performance in the coming months, which may have sparked investor enthusiasm despite the current quarter's setback. The stark contrast between the disappointing Q1 results and the promising Q2 outlook appears to be the driving force behind the stock's after-hours surge.