July 21 (Reuters) – Credit bureau Equifax said on Tuesday it expects full-year revenue below Wall Street estimates, as macroeconomic uncertainty pressures growth in the mortgage market.
Elevated interest rates and the U.S. Federal Reserve’s hawkish stance to curb inflation from the Iran war could weigh on the already sluggish housing market.
Here are some more details:
• The company, which assesses the creditworthiness of home buyers, expects revenue for the full year between $6.71 billion and $6.78 billion, below analysts’ average estimate of $6.76 billion, according to data compiled by LSEG.
• Equifax had previously forecast revenue between $6.69 billion and $6.81 billion for the year 2026.
• The benchmark 30-year mortgage rate, which underpins most U.S. home loans, has hovered around 6.6% in recent months, which is much higher than the average 4.3% in the previous decade.
• Earlier this year, Freddie Mac and Fannie Mae said they will now accept mortgages assessed using credit scoring system VantageScore 4.0.
• Founded in 2006, FICO rival VantageScore is a credit score modeling and analytics company jointly owned by Equifax, Experian and TransUnion.
• Equifax’s management had previously stressed acquisitions would strengthen its business. Earlier this month, it acquired Mexico-based credit information services provider Círculo de Crédito in a deal valued at $750 million.
• Equifax’s shares have fallen 17% this year, as of last close, and are down 11% in premarket following the results.
• The company’s adjusted profit came in at $2.25 per share for the second quarter, compared with $2 per share a year earlier.
(Reporting by Pragyan Kalita in Bengaluru; Editing by Shreya Biswas)
Comments