Countrywide Financial Corporation
(NYSE:CFC) shares spiked over fifteen percent today after troubled
realestate firm posted better than expected earnings. The company
reported a net loss of $1.2 billion, or $2.85 per diluted share,
compared to net income of $1.03 per diluted share in the third quarter
of 2006.
"Countrywide's results for the third quarter of 2007
reflect the impact of unprecedented disruptions in the U.S. mortgage
market and the global capital markets, as well as continued weakening
in the housing market," said Angelo R. Mozilo, Chairman and Chief
Executive Officer. "However, during the period we also laid the
foundation for a return to profitability in the fourth quarter.
Countrywide has responded decisively and taken the steps we believe are
necessary to address the current challenging market environment."
Countrywide's
guidance was the most carefully watched area of its earnings. The
company expects weakness in the housing market to continue in the
near-term and absent declining interest rates, lower mortgage market
origination volumes are anticipated through 2008. However, the company
said it expects to be profitable in the fourth quarter of 2007 and in
2008.
"We view the third quarter of 2007 as an earnings trough,
and anticipate that the Company will be profitable in the fourth
quarter and in 2008," said David Sambol, President and Chief Operating
Officer. "Over the longer term, we believe that prospects for the U.S.
housing and mortgage markets, as well as for Countrywide, remain very
attractive."
In the end, this is great news for Countrywide
shareholders. The company's problems aren't nearly as bad as many
people once believed, as the real estate firm looks to return to
profitability before the year is over. The company also noted that it
wss taking advantage of the industry consolidation to bolster its future
prospects even further. Combined, these factors make CFC a stock
worth watching!
Related Companies
Principal Financial Group (PFG)
Torchmark Corporation (TMK)
PHH Corporation (PHH)