An FBR Capital Markets Corp. analyst raised his fourth-quarter profit estimate for PHH Corp., saying rising interest rates during the period probably generated an $80 million fair-value gain on mortgage servicing rights.

"PHH is a unique mortgage bank in that the company does not hedge its MSR, which adds a lot of volatility to earnings," the analyst, Paul Miller, wrote in a note to clients Thursday. Miller wrote that he now expects PHH to post a profit of 86 cents a share, 10 cents more than his previous estimate.

PHH, of Mount Laurel, N.J., is expected to report fourth-quarter results in late February or early March.

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