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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: ild who wrote (15950)	6/28/2004 4:37:44 PM
From: CalculatedRisk	Read Replies (2) of 110194

WM Warns! Washington Mutual Adjusts Earnings Outlook for 2004 Monday June 28, 4:30 pm ET Rising Interest Rates Impact Mortgage Banking Growth in Retail Banking & Financial Services Continues biz.yahoo.com SEATTLE--(BUSINESS WIRE)--June 28, 2004--Washington Mutual, Inc. (NYSE:WM - News) today announced that expectations for a sustained increase in long-term interest rates will significantly impact the company's Mortgage Banking business resulting in 2004 earnings below previous guidance. Higher interest rates have lowered the company's mortgage production expectations at a time when cost reduction plans have not yet fully taken effect. The rise in interest rates is not expected to have a material effect on the 2004 performance of the company's Retail Banking & Financial Services and Commercial Group businesses. "It now appears to us that the shift in the interest rate environment in recent months, with a sharp increase in long-term rates and a related reduction in mortgage volumes, will continue through the rest of the year. The effects of these changes are likely to outpace the timing of ongoing cost reduction plans in our Mortgage Banking business," said Kerry Killinger, Chairman, President and Chief Executive Officer. "We're disappointed in this change in our 2004 outlook and we will not be satisfied until we have completed the resizing of our expense base and improved the efficiency and performance of our Mortgage Banking business," continued Killinger. "At the same time, we will remain focused on executing our core middle-market retail strategy." Earnings for the full year are now estimated to range from $3.00 to $3.60 per diluted share. <MORE>

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