Quicken Loans' parent Rocket Companies shows $3.4B profit in first earnings report

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Quicken Loans offices in downtown Detroit in March 2017. Rocket Companies, which includes Quicken Loans, announced a $3.4 billion profit for its second quarter. - Ryan Garza/Detroit Free Press/TNS

Detroit-based Rocket Companies, the new publicly traded firm that includes Dan Gilbert’s Quicken Loans, announced a massive profit Wednesday in its first earnings report since its IPO last month.

Rocket reported net income of $3.4 billion in the second quarter that ended June 30, compared to a net loss of $54 million during the same three-month period last year.

The company also did a record $72.3 billion in closed loans, which was 126% more than the same period in 2019.

Rocket closed Wednesday at $31.30, up about 2%.

“Record low interest rates are driving demand for home loans,” Rocket Companies CEO Jay Farner told Wall Street analysts.

Quicken Loans and other mortgage lenders have seen a flurry of business during the COVID-19 pandemic, largely because super-low interest rates are prompting many borrowers to refinance their mortgage.

The majority of Quicken Loan’s mortgage business is refinancing.

The stock has been on a tear since its Aug. 6 debut at $18 a share on the New York Stock Exchange.

Rocket’s initial offering was below the company’s $20 to $22 target price because, according to a report in Bloomberg, investors thought it should be priced more like a consumer or financial company, not a tech company.

The IPO amounted to selling about 8% of the company.

Rocket also reported Wednesday that prior to the IPO, it distributed $2.26 billion to its parent company Rock Holdings.

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©2020 Detroit Free Press