Countrywide’s losses mount
Countrywide Financial Corp. said Tuesday it lost $893 million in the first quarter, as rising loan defaults amid a deepening housing downturn forced the nation’s largest mortgage lender and servicer to sharply increase its provision for loan losses and book other credit-related charges.
The latest results marked the third consecutive quarterly loss for Countrywide, which reaped a windfall during the housing boom but has been struggling since last summer, despite predictions last fall by CEO Angelo Mozilo that his company would turn a profit in 2008.
The Calabasas, Calif.-based company, which agreed in January to sell itself to Bank of America Corp. for about $4 billion in stock, did not conduct an earnings conference call with analysts, citing the proposed sale.
The company said its loss amounted to $1.60 per share for the quarter ended March 31. A year earlier, it earned $434 million, or 72 cents per share.
Revenue plunged 72 percent to $679 million from $2.4 billion in the year-ago quarter.
The latest results reflected $3.05 billion in credit-related charges. That includes $1.5 billion set aside to cover losses on mortgage loans, up from $158 million in the year-ago period.
Charge-offs, or loans written off as not being repaid, totaled $606 million during the quarter, compared with $39 million in the same quarter last year, the company said.
In other first-quarter earnings reports:
•Luxury automaker BMW AG said its first-quarter profit fell 17 percent because of a one-time charge taken to better insulate the company from lower used-car prices and the risk of defaults on loans for leased cars in the U.S. The Munich-based company, whose brands include BMW, Mini and Rolls-Royce, earned $761 million. Sales rose 11 percent to nearly $20.8 billion.
•Television station owner Belo Corp. said it swung to a loss after accounting for the spin-off of four newspapers. Revenue fell as trouble in the auto business reduced demand for advertising time. Dallas-based Belo said it lost $15.4 million in the first quarter, compared with a profit of $15.5 million a year earlier.
•Waste Management Inc.‘s first-quarter income edged up just over 1 percent as an ongoing strategy to dump or reprice work with low profit margins offset decreased volumes and higher fuel costs. The nation’s largest garbage hauler and landfill operator said it earned $241 million, compared with $238 million a year earlier. Revenue rose 2.5 percent to $3.27 billion.
•Archer Daniels Midland Co. cashed in on volatile prices and heavy demand for the corn, soybeans and wheat it processes to generate a 42 percent increase in profits. Profits grew to $517 million, compared with a year-ago profit of $363 million. Revenue surged more than 64 percent to $18.71 billion, from $11.38 billion.
•United States Steel Corp.‘s first-quarter earnings slipped 14 percent as higher sales failed to offset declines in Europe. The Pittsburgh-based steel-maker posted earnings of $235 million, down from $273 million last year. Sales jumped 38 percent to a record-setting $5.2 billion, from $3.76 billion in the first quarter of 2007.
•Burlington Northern Santa Fe Corp., which operates the nation’s second-largest railroad, said its first-quarter earnings jumped 30 percent on more rail shipments of farm products and coal, as well as larger fuel surcharges. The owner of the BNSF Railway Co. earned $455 million, compared with $349 million a year ago. Revenue jumped 17 percent to $4.26 billion.
•Cosmetics company Avon Products Inc. said its profit rose 23 percent as international sales, particularly in Latin America, offset declining North American revenue. The direct seller of beauty products said quarterly net income rose to $184.7 million, from year-ago profit of $150 million. Total revenue grew 14 percent to $2.50 billion from $2.19 billion last year.
•BP PLC and Royal Dutch Shell PLC, Europe’s two biggest oil producers, posted forecast-busting earnings thanks to record crude oil prices that are expected to bolster profits across the industry. The combined profits of $17 billion reignited calls for a windfall tax on oil profits as consumers struggle to pay for food and fuel. BP posted a 63 percent gain in first-quarter net profit to $7.6 billion, while Shell reported a 25 percent rise to a record $9.08 billion. Revenue at BP jumped 44 percent to $89.2 billion, while sales at Shell soared 55 percent to $114 billion.
•CBS Corp. reported a 14 percent increase in earnings as higher syndication sales from “CSI” made up for not having the Super Bowl broadcast this year. Its shares rose nearly 4 percent. The company, which also owns the Showtime cable channel, Simon & Schuster and a major radio business, earned $244.3 million in the first three months of the year, up from $213.5 million a year ago. Revenue was essentially flat at $3.65 billion versus $3.66 billion a year ago, but still came in ahead of estimates of $3.55 billion.
•Office Depot Inc., the nation’s second biggest office-supply chain, said its profit dropped 55 percent due to North American sales declines. The Delray Beach, Fla.-based company said earnings dropped to $68.8 million, compared with $153.8 million a year earlier. Sales dipped 3 percent to $3.96 billion from $4.09 billion.