Countrywide Financial to cut 2,500 jobs (AP)
31.10.2006 13:44 Finance
Earnings increased to $647.5 million, or $1.03 per share, from $634 million, or $1.03 per share, in the prior-year period.
Analysts, on average, were expecting third-quarter net income of $1.08 per share, according to a Thomson Financial survey.
The company's loan fundings slipped 22 percent to $115 million from $147 million, but its loan portfolio grew 18 percent to $1.24 billion from $1.05 billion.
Net interest income, the profit banks derive from interest bearing accounts, rose 23 percent to $799 million, from $651.2 million last year, driven by a $14.8 billion increase in interest-bearing accounts. Non-interest income, derived from services and other fees, dipped 9 percent, to $36 million, from $40 million a year ago.
Countrywide said it would make cuts that would result in annualized savings of about $500 million. Those cuts include 2,500 corporate and organizational jobs in offices across the country. Some of those positions have already been eliminated, the company said.
The company employed 55,000 before the cuts.
Countrywide also said Tuesday it will pay Chairman and Chief Executive Angelo Mozilo a base salary of $1.9 million through 2009.
The mortgage lending company said Mozilo is expected to step down as CEO after Dec. 31, 2009, but stay on as chairman through Dec. 31, 2011.
Mozilo will also receive stock appreciation rights and restricted stock with a target value of $10 million, the company said in a filing with the Securities and Exchange Commission.
Countrywide will also reimburse Mozilo for $10 million in forgone retirement payments he would have received if he had retired in 2006.
The company narrowed its profit forecast for the year to earnings of $4.10 to $4.50 per share, from $4 to $4.80 per share predicted in July. Analysts predict full-year earnings of $4.37 per share.
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