(Reuters) – Credit ratings firm Equifax forecast on Wednesday its second-quarter revenue below estimates after strong economic data boosted chances of rates staying higher-for-longer, potentially delaying a recovery in the mortgage market.
Shares of the Atlanta, Georgia-based company fell 6.4% in extended trading.
U.S. job growth was above expectations in March and wages also increased steadily, suggesting the economy ended the first quarter on solid ground and potentially delaying anticipated Federal Reserve interest rate cuts this year.
Over the last several months, expectations regarding the extent and timing of the Fed’s rate reduction have changed as investors lose faith in the policymakers’ ability to reduce borrowing costs without triggering an inflationary resurgence in the strong economy.
Equifax expects second-quarter revenue between $1.41 billion and $1.43 billion, below analysts’ average estimate of $1.44 billion, as per LSEG.
In a bright spot, the forecast for the year indicates an expected 11% decline in 2024 U.S. mortgage credit inquiries, compared with an over 16% year-on-year decline expected by the company in the previous quarter.
Net profit came in at $1 per share in the quarter ended March 31, up from 91 cents per share last year.
(Reporting by Pritam Biswas in Bengaluru; Editing by Alan Barona)
