Industry News

WaMu earnings drop 49%

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Washington Mutual today announced second-quarter 2004 earnings of $489 million, or $0.55 per diluted share, down 49 percent on a per-share basis from $995 million, or $1.07 per diluted share from continuing operations for the same period a year ago. The reduction in second-quarter net income resulted primarily from a reduction in net home loan mortgage banking income, which declined to zero from $611 million in the second quarter of 2003 and $531 million in the first quarter of this year. The second-quarter decrease reflected the large change in the hedging performance of the company's mortgage servicing rights since the end of the first quarter. "Most of Washington Mutual is strong and growing profitably, but this was a disappointing quarter," said Kerry Killinger, chairman, president and chief executive officer. "While second quarter results were affected by the volatility of our mortgage servicing rights, the root of our problem is the unacceptably high cost structure in our mo...