Ellie Mae misses estimates due to lower mortgage volumes
Oct 31 (Reuters) - Ellie Mae Inc, whose software is used by mortgage professionals, reported a lower-than-expected third-quarter profit, hurt by lower mortgage volumes and higher R&D spending, pushing its shares down more than 20 percent after the bell.
Eliie Mae, whose software is used for loan processing and to interact with lenders and investors, said its net income halved in the quarter ended Sept. 30 and warned of lower-than-expected earnings in the fourth quarter.
The company forecast earnings of 17 cents to 18 cents per share for the fourth quarter, well below the 24 cents expected by analysts, according to Thomson Reuters I/B/E/S.
It forecast revenue of $29.5 million to $30.5 million, below the estimated $32.5 million.
Total mortgage origination volumes is expected to fall 14 percent to $1.8 trillion in 2013, according to the composite quarterly forecast of Fannie Mae, Freddie Mac and the Mortgage Bankers Association.
Ellie Mae's net income nearly halved to $3.36 million, or 12 cents per share, in the third quarter from $6.83 million, or 25 cents per share, a year earlier.
Revenue rose 20 percent to $33 million.
Analysts had expected earnings of 30 cents per share on revenue of $34.4 million, according to Thomson Reuters I/B/E/S.
"Although we had impressive revenue growth year over year, it was not as strong as we had expected," Chief Executive Sig Anderman said.
R&D expenses rose more than 38 percent to $6.57 million.
The company also said it acquired MortgageCEO, a software company specializing in customer relationship management for the residential mortgage industry.
Bloomberg reported in August that Ellie Mae was exploring a sale and had interviewed banks to manage the process.
Ellie Mae's shares closed at $28.90 on Thursday on the New York Stock Exchange. They were down 17 percent at $24.00 in extended trading.
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