Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: JakeStraw who wrote (506627)	12/9/2003 12:39:24 PM
From: jackhach	Read Replies (1) \| Respond to of 769667

Writing is on the wall, borrowing party is OVER! Borrow Until Something Happens ...its NOW happening. --------- Washington Mutual warns on EPS Thrift's job cuts total 5,400 as mortgage business slows By David Weidner, CBS.MarketWatch.com Last Update: 12:18 PM ET Dec. 9, 2003 NEW YORK (CBS.MW) -- Washington Mutual said Tuesday that its 2003 earnings per share will miss Wall Street estimates, adding that its job cuts will total 5,400 as it slashes costs amid a slowing mortgage business. The news sent Washington Mutual shares down $3.24, or 7.4 percent, to $40.62 in morning trading. The Seattle-based thrift said it cut 4,500 jobs between August and November and will slash an additional 900 jobs in the coming weeks. The jobs represent about 10 percent of Washington Mutual's (WM: news, chart, profile) work force and come mainly from the support side of the mortgage business. Meanwhile, the thrift said it wants to boost its mortgage sales force by 35 percent. Washington Mutual also said it expects earnings per share for 2003 to range between $4.15 and $4.25. Its outlook for 2004 earnings was cut to a range of $4.30 to $4.80. The revisions are below the analyst consensus of $4.42 for 2003 and encompass the $4.75 estimate for 2004, as measured by Thomson First Call. Washington Mutual, which is hosting an investors' day conference in New York, said the revisions were the result of price competition in the mortgage market and shrinking volumes. The bank is refocusing its efforts on adjustable rate mortgages. "We are adjusting our business to adapt to the new realities of the current environment," said Chairman Kerry Killinger in a statement. Mortgage volume is expected to decrease by 50 percent in the fourth quarter versus the third quarter, Washington Mutual said. The company said it plans to reduce noninterest expenses by $1 billion in the next six quarters. Broader implications The slowing mortgage cycle suggests that the vast majority of homeowners able to refinance their mortgages have done so. The Federal Open Market Committee, which meets Tuesday, is not expected to raise the 1 percent overnight federal funds rate that guides banks. But many expect that the FOMC will raise rates in early 2004, stifling any refinancing volume that remains. However, that doesn't mean homebuyers will not be out in force. Housing starts remain strong in some regions, including the South, said Chris Marinac, an analyst with FIG Partners in Atlanta. That means Washington Mutual bankers let go may find work with smaller competitors, which will continue to originate mortgages in targeted areas. "There's clearly a trend toward lower volumes," Marinac said. "But there are certain smaller institutions that can gain market share from WaMu." David Weidner covers Wall Street for CBS MarketWatch.com.