IndyMac loss dwarfs own forecast

IndyMac Bancorp Inc (NYSE:IMB - News), one of the largest independent U.S. mortgage lenders, posted a quarterly loss on Tuesday that was more than five times larger than it had projected, hurt by mounting delinquencies and a collapse in demand to buy its home loans. The parent of IndyMac Bank, one of the largest U.S. savings and loans, halved its dividend and said another cut is possible if it loses more money. It also quadrupled its reserves for bad loans. "It's going to be a tough year, year and a half," Chief Executive Michael Perry said on a conference call.

The third-quarter net loss for Pasadena, California-based IndyMac totaled $202.7 million, or $2.77 per share. It was the first quarterly loss since the fourth quarter of 1998. Profit a year earlier was $86.2 million, or $1.19 per share. Excluding items, the loss was $2.74 per share -- six times the average analyst forecast, according to Reuters Estimates, of a loss of 46 cents. IndyMac had on September 7 forecast a loss of nil to 50 cents per share. "Conditions in mortgage markets are deteriorating so rapidly that management guidance often becomes obsolete nearly as soon as they publish or report it," wrote Lehman Brothers Inc. analyst Bruce Harting. "IndyMac demonstrates the point."


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source: updatere.com