Countrywide Financial Corp, the largest U.S. mortgage lender, on Tuesday reported a 33 percent decline in second-quarter profit and slashed its full-year earnings forecast, citing a difficult housing market.
Net income for the Calabasas, California-based company fell to $485.1 million, or 81 cents per share, from $722.2 million, or $1.15, a year earlier. Revenue fell 15 percent to $2.55 billion.
Analysts on average expected profit of 93 cents per share on revenue of $2.9 billion, according to Reuters Estimates.
Countrywide also cuts its full-year earnings forecast to a range of $2.70 to $3.30 per share from the $3.50 to $4.30 per share it had forecast in April, and the $3.80 to $4.80 it had forecast in January. Analysts on average expected $3.65. Profit was $4.30 per share in 2006.
“Softening home prices continued to affect many areas of the country and delinquencies and defaults continued to rise across all mortgage product categories,” Chief Executive Angelo Mozilo said in a statement. “Due to these adverse conditions, the company incurred increased credit-related costs in the quarter, primarily related to its investments in prime home equity loans.”
Mozilo added that for the second half of the year, “we expect difficult housing and mortgage market conditions to persist.”
Countrywide shares fell Tuesday. Through Monday, the shares had fallen 20 percent this year, compared with a 13 percent decline in the KBW Mortgage Finance Index.