Reflecting the slowdown in the mortgage market in the second half of the year, Washington Mutual (NYSE: WM) announced decreased earnings in the fourth quarter of 2003.

WaMu reported fourth-quarter earnings of $842 million, or 93 cents a share as compared with $941 million, or $1 a share for the same period in the previous year.

The company closed the sale of its consumer finance subsidiary, Washington Mutual Finance, on Jan. 9, 2004. All financial information reflects Washington Mutual Finance as a discontinued operation.

Regardless, WaMu reported 2003 annual earnings of $3.88 billion, or $4.21 a share, versus $3.86 billion, or $4.02 a share in 2002, an increase of 5 percent on a per share basis.

Record home loan volume of $384.18 billion for 2003 increased $104.7 billion from $279.45 billion in 2002; and the fourth quarter’s volume of $57.53 billion, which reflected a slowdown in the mortgage market, was down $42.28 billion from $99.81 billion in the fourth quarter of 2002;

As previously announced, the company eliminated the equivalent of 4,500 full-time positions in its home lending support operations during the last four months of 2003. The majority of this total reflected reductions in non-employee temporary and contract personnel and decreased overtime.

Washington Mutual also anticipates a reduction of 2,900 full-time equivalent personnel in the first quarter of 2004. Additional efficiencies will be accomplished by completing the previously delayed integration of Washington Mutual’s mortgage acquisitions from 2001 and 2002, as well as cost-saving initiatives in other parts of the organization.

Killinger added that while the company is reducing employment in its administrative and support functions, it continues to add to its sales force nationally.

Washington Mutual is a retailer of financial services that provides a diversified line of products and services to consumers and commercial clients.


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