Can Improving Servicing Revenues Stabilize RITM's Q3 Earnings?

Core Insights - Rithm Capital Corp. (RITM) is scheduled to report its third-quarter 2025 results on October 30, 2025, with earnings estimated at 54 cents per share and revenues of $1 billion [1][5]. Earnings Estimates - The earnings estimate for the third quarter has increased by 2 cents over the past 60 days, remaining consistent with the previous year's level [2]. - The Zacks Consensus Estimate for quarterly revenues indicates a significant year-over-year increase of 61.5% [2]. Full-Year Projections - For the full year 2025, the revenue estimate for Rithm Capital is projected at $4.3 billion, reflecting a year-over-year decrease of 17.9% [3]. - The consensus estimate for the current year's EPS is $2.15, suggesting a modest growth of 2.4% year-over-year [3]. Recent Performance - Rithm Capital has consistently beaten consensus estimates in the last four quarters, with an average surprise of 20.1% [3]. Earnings Prediction Model - The current model does not predict a definitive earnings beat for RITM, as it has an Earnings ESP of 0.00% and a Zacks Rank of 2 (Buy) [4]. Revenue Breakdown - The consensus estimate for asset management revenues is $92.2 million, representing a year-over-year increase of 13.8% [5]. - Net servicing revenues are expected to reach $413.9 million, indicating substantial improvement from the previous year [5][6]. Cost Considerations - Increased general and administrative costs, along with lower interest income, may pressure overall profitability [5][7]. - The Zacks Consensus Estimate for interest income shows an anticipated decline of 11.9% year-over-year [7]. Strategic Factors - The profitability of Rithm Capital's Newrez business is expected to positively impact its Origination & Servicing segment [6]. - Strategic partnerships and a diversified platform are anticipated to support third-quarter results [6]. Comparison with Peers - While an earnings beat for Rithm Capital appears uncertain, other companies in the finance sector, such as Franklin Resources, Ameriprise Financial, and Brookfield Corporation, show potential for earnings beats based on their respective Earnings ESPs and Zacks Ranks [8][9][10][11].