Sallie Mae Reports 14% Rise In Income

The Student Loan Marketing Association said Friday its fourth-quarter net income rose 14 percent as revenue from its student loans increased and expenses fell.

The profits exceeded analysts’ estimates. Sallie Mae shares rose $5.25 to $70.25, the highest since Dec. 5.

The company, better known as Sallie Mae, said its fourth-quarter net income rose to $102.9 million, or $1.67 a share, from $89.9 million, or $1.16, in the year-ago period.

The earnings reflect an accounting change in Sallie Mae’s practice of deferring part of the income from its student loan investments. The change added 9 cents to the quarter’s earnings per share.

Wall Street analysts expected Sallie Mae, which has a regional loan-processing center in Spokane, to earn about $1.31 a share in the quarter, according to the average of five analysts surveyed by Zacks Investment Research.

“The company reported very strong earnings,” said Jonathan Gray, senior research analyst at Sanford C. Bernstein & Co. Inc. “The stock should sell at $75 based on what we know.”