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Countrywide Profit Rises 27%

October 28, 2005|From Bloomberg News

Countrywide Financial Corp., the biggest U.S. mortgage lender, said Thursday that its third-quarter profit rose 27% as fees it collected from processing home-loan payments surged.

Net income advanced to $633.9 million, or $1.03 a share, from $498.1 million, or 81 cents, a year earlier, the Calabasas-based lender said. Hurricanes Katrina and Rita cut earnings from the company's insurance and lending businesses by $115 million, or 19 cents a share.

The company was expected to earn $1.04 a share, the average estimate of 17 analysts surveyed by Thomson Financial. Countrywide also said it expected 2005 earnings of $3.85 to $4.40 a share. The company's previous forecast was $3.85 to $4.60.

Profits at Countrywide and other companies that service mortgages are rising as near-record home buying boosts fees from processing borrowers' payments. A 38% jump in such fees helped offset a loss at the firm's business of extending loans.

Earnings at the mortgage business, which accounted for two-thirds of profit, increased 42% to $703 million. The company's retail bank had $278 million in profit, up 71%.

Countrywide shares, which had declined 18% this year through Wednesday, rose 27 cents, or 0.9%, to $30.57 on Thursday but gave back most of a 5.3% gain earlier in the day.

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