PennyMac Financial Services Inc. (PFSI) experienced a sharp pre-market plunge of 21.84% on Friday, continuing the negative momentum from the previous trading session.
The significant drop follows the release of the company's disappointing fourth-quarter financial results. The mortgage lender reported quarterly earnings per share of $1.97, falling well short of the FactSet consensus estimate of $3.10. Revenue for the quarter came in at $538 million, missing the IBES estimate of $642.5 million.
More critically, the company's adjusted pretax profit was $47.8 million, dramatically below analyst expectations of $236.6 million. These substantial misses on both top and bottom line metrics triggered the negative reaction from investors, reflecting disappointment with the company's quarterly performance relative to market expectations.