Washington Mutual Inc., the largest U.S. savings and loan, Monday slashed its 2004 profit forecast and said it expects to cut more jobs as rising long-term interest rates hurt its mortgage business.
The Seattle-based company, one of the largest U.S. mortgage lenders, now expects 2004 profit of between $3 and $3.60 per share. It previously forecast profit of approximately $4.35, spokesman Alan Gulick said. Analysts polled by Reuters Estimates, on average, forecast $4.05.
“It now appears to us that the shift in the interest rate environment in recent months, with a sharp increase in long-term rates and a related reduction in mortgage volumes, will continue throughout the rest of the year,” Chief Executive Kerry Killinger said in a statement.
Washington Mutual ended March with 59,173 employees after cutting about 7,400 jobs in the prior six months, Gulick said.
“You can anticipate additional job reductions during the remainder of 2004,” including “facility closures and headcount reductions” in mortgage banking as revenue declines, he said.