Industry News

Countrywide reports 28% decline in profits

U.S. mortgage lender posts uncharacteristic drop

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Countrywide Financial Corp. today reported a 28 percent decline in its second-quarter profit over the second quarter of 2004 after it sold fewer loans to investors and mortgage banking profit fell by nearly half. The company reported consolidated net earnings of $566 million, or $0.92 per share, compared to last year's second-quarter earnings of $786 million, or $1.29 per share. A group of financial analysts polled by Thomson Financial had predicted earnings of $0.99 a share. Revenue fell 7 percent to $2.31 billion, while expenses rose 15 percent to $1.37 billion. Though loan production rose 21 percent to $121.1 billion, Countrywide kept about $9 billion of loans it might otherwise have sold to help provide interest income over time. This decision cost about 15 cents per share of profit. The company reported that total loan production volume was $121 billion, up 21 percent from the comparable quarter last year. The servicing portfolio has grown by $238 billion, or 33 percent, si...