LoanDepot Fails as Second Quarter Revenue Drops 60%; Fall in shares

Shares of Foothill Ranch-based LoanDepot Inc. (NYSE: LDI) fell 7.6% in after-hours trading after its second-quarter results fell short of analysts’ expectations.

The company, the nation’s seventh-largest mortgage originator, said revenue fell 60% to $308.6 million and a loss of 66 cents per share. Analysts had expected sales of $372 million and a loss of 21 cents.

“Our second quarter results reflect the extremely challenging market environment that continues to exist in our industry, which has resulted in a continued decline in our mortgage volumes and profit margins,” chief executive Frank Martell said in a statement. .

The company last month announced massive layoffs as interest rate hikes by the Federal Reserve dried up mortgage refinances, which is loanDepot’s biggest market.

The company said today that it plans to reduce its workforce even below its previous target of 6,500 by the end of 2022. At the start of August, the company’s workforce was 7,400, down from 11,300 at the end of 2021.

The company also said it would exit the wholesale channel, where it provides loans and other services to independent mortgage originators.

“Our exit from wholesale will also allow us to direct resources to other origination channels, reduce operational complexities and increase margins,” the company said.

The shares fell to $1.70 after the earnings announcement. A year ago, shares were fetching nearly $40 and a market capitalization of $4 billion.

For a deeper dive into loanDepot, check out the July 18 print issue of the Business Journal.