PHH said that its fleet management business continued its strong contribution to overall earnings in the second quarter 2011, with fleet segment profits up 46% from the second quarter of 2010, while mortgage business results reflect continued weakness in the housing finance sector, with volumes down from the previous year and lower gain on sale margins.

PHH reported a net loss of $41 million, compared to a loss of $133 million in the second quarter of 2010 and core earnings (after-tax) of $29 million compared to $28 million in the second quarter of 2010.

Fleet profit growth was primarily the result of a 10% increase in net fee income from the second quarter of 2010. PHH expects to continue to grow the fleet business and its contribution to total earnings through new client signings and a sustained effort to increase fee-based services.

The fleet management segment profit was $19 million, up from $13 million in the second quarter of 2010, driven by continued strong growth in fee-based revenues Interest rate lock commitments (IRLCs) of $7.5 billion, compared to $8.4 billion in the second quarter of 2010. Maintenance service, fuel and accident management average units all increased in 2011 compared to 2010 despite a 6% decline in the number of leased vehicles. Year-to-date segment profit increased by $14 million to $35 million in 2011, driven by higher units and usage of fee and asset-based management services and lower costs.

To read full text of the PHH earnings release click here.