Altruistica

"Altruistica": Seeking a return to full financial disclosure and regulatory oversight. A financial market analysis blog for "entertainment purposes" only by an experienced CFA seeking new hedge fund engagements for investment writing and analysis. The author has experience investing internationally, running a hedge fund, making angel investments, and helping launch five startup companies. Investors should do their own due diligence.

16 January 2007

ANOTHER home financing firm issues earnings warning


Indymac profit shrinks as housing slows; Financing firm issues earnings warning. One can hardly be surprised as NDE has a reputation as 'lender of last resort'.

NEW YORK (MarketWatch) - Indymac shares fell Tuesday after it issued a profit warning as the U.S. housing slowdown takes a bite out of the company's mortgage business. The company said it expects to keep its dividend at 50 cents a share for the quarter. It's also exploring a stock buyback plan "to enhance shareholder value." Shares fell 4% to $41.71 in early trades. Indymac (NDE $43.55, -0.02, 0.0% ) said it expects fourth-quarter net income of 97 cents a share, lower than its earlier forecast of $1.30-$1.40 a share. Analysts surveyed by Thomson First Call forecast earnings of $1.34 a share, on average. "This shortfall reflects the challenging times being faced by the mortgage and housing industries and the difficult nature of forecasting earnings in our business," the Pasadena, Calif. company said.

Indymac cited higher credit costs related to loan loss provisions, secondary market reserves and market-to-marker delinquent loans held for sales and residuals and non-investment grade securities. The financing firm said its net interest margin is being squeezed by loans held-for-sale and its thrift investment portfolio in the wake of an inverted yield curve in the bond market.
Its loan production mix has shifted toward fixed rate mortgages and intermediate term fixed rate loans vs. variable rate loans. It also cited a decline in its servicing/interest only securities portfolio and other factors. Offsetting these factors was a tax benefit.

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