Wall St. expected Countrywide Fiancial (CFC) to have an EPS loss of $1.28 on $232 million in revenue. Concerns about earnings have driven the stock to a 52-week low of $13
But, the company saved itself, at least temporarily, with a good quarter, and shares are up as much as 14% in the pre-market.
CFC reported a net loss of $1.2 billion, or a loss of $2.85 per diluted share ($2.12) per diluted share excluding the impact of the below market strike price of the convertible preferred issued in the third quarter of 2007 for the third quarter ended September 30, 2007, compared to net income of $648 million, or $1.03 per diluted share, for the third quarter of 2006.
The most important statement fromt the company may have been its guidance. Management expects continued weakness in the housing markets in the near-term and absent declining interest rates, lower mortgage market origination volumes are anticipated for the remainder of 2007 and for 2008 as a result. Furthermore, the Company expects its credit costs to remain at elevated levels through 2008 as a result of environmental conditions. Despite these expectations of continued industry challenges, management expects the Company to be profitable in the fourth quarter of 2007 and in 2008.
Countrywide’s consolidated earnings are expected to range between $0.25 and $0.75 per diluted share for the fourth quarter of 2007
Douglas A. McIntyre
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