July 17, 2020 / 3:42 PM / a month ago

Quicken Loans parent expects profit to surge ahead of U.S. IPO

(Reuters) - Rocket Companies Inc said on Friday it expects a profit of more than $3 billion in the second quarter compared to a loss a year earlier, as the parent company of the U.S. mortgage lender Quicken Loans gears up for an initial public offering (IPO).

Higher borrowings by U.S. consumers in a historically low-interest environment led to a surge in income, the company said, and would likely boost Rocket’s planned public listing.

The Detroit-based company, founded by billionaire Dan Gilbert, expects a profit between $3.35 billion and $3.55 billion in the quarter ended June 30, compared with a loss of $54 million, a year ago, according here to a regulatory filing.

“While the financial markets have demonstrated significant volatility due to the economic impacts of COVID-19, interest rates have fallen to historic lows resulting in increased mortgage refinance originations and favorable margins,” the company said in the filing.

Total net revenue is expected to be between $4.93 billion and $5.13 billion in the quarter, five times more than a year earlier.

Rocket had $72.3 billion in originations, up from $31.96 billion.

Earlier this month, the company filed publicly for an IPO on the New York Stock Exchange. It, however, did not disclose the amount it intends to raise or when it wants to complete the process.

Reporting by C Nivedita and Joshua Franklin; Editing by Shinjini Ganguli

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