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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (4854)	1/12/2004 4:17:21 PM
From: yard_man	Read Replies (2) \| Respond to of 110194

Countrywide Says Will Miss 2003 Analyst Estimates Mon January 12, 2004 02:28 PM ET [BUBBLE starting to come undone??] (Page 1 of 2) By Nicole Maestri NEW YORK (Reuters) - Mortgage lender Countrywide Financial Corp. said on Monday that its 2003 earnings would miss Wall Street expectations, citing the impact of interest rates on the portfolio of loans that it services. Shares of Countrywide fell 3.7 percent in early morning trading, but by afternoon were off 1.3 percent. Countrywide both originates loans and services loans, and has enjoyed record profits as low interest rates have spurred demand for home loans. Analysts are watching the company closely to see how it will perform as interest rates rise from record lows and the refinancing boom slows. Countrywide said it expects 2003 earnings per share of $12.30 to $12.45 on a split-adjusted basis, within the lower half of its prior range of $12 to $13.50. Wall Street analysts on average were expecting earnings of $13.06, according to Reuters Research, a unit of Reuters Group Plc. Countrywide reaffirmed its 2004 earnings per share estimate of $9 to $12. Countrywide said the narrower 2003 view was due to the impact of interest rates on its mortgage servicing business, which services loans by mailing out bills and collecting payments. The Calabasas, California company has said its mortgage servicing business should help shield it from declining loan growth. But that business does not perform as well amid lower interest rates, such as those seen during the fourth quarter, since a declining rate environment tends to decrease the life of the portfolio. But investors are still focused on how well Countrywide's loan origination business will fare amid a less robust refinancing environment. "What we have been more worried about is whether the lower production volume (loan originations) in the industry would reduce (Countrywide's) profitability across the board, and I think that's not happening at this point," said Matthew Park, an analyst with A.G. Edwards & Sons. "I think the production side should continue to deliver solid earnings." Park has a buy rating on shares of Countrywide and does not own any shares. Countrywide said new mortgage application daily volume fell to $1.3 billion during December, from $1.5 billion in November and $1.9 billion a year ago. It said total loan fundings rose 13 percent in December compared with November, to $25 billion, helped by more business days in December. The portfolio of loans for which it provides servicing rose to $645 billion from $631 billion at the end of November. Separately, the Nasdaq Stock Market said Countrywide was one of six companies listed on the New York Stock Exchange that would also trade on its market. "We consider it to be a pretty low-risk experiment that allows us and the markets to explore the potential benefits ... of dual listing," said a company spokesman. Shares of Countrywide company fell 91 cents to $71.13 on the NYSE. Previous 1\| 2