Great News! Freddie Mac only loses $821 million

Posted Aug 6th 2008 8:50AM by Peter Cohan
Filed under: Earnings Reports

The New York Times reports that Freddie Mac (NYSE: FRE) lost $821 million in the second quarter. Its revenues rose 10% to $1.69 billion -- including a 92% spike in net interest income to $1.5 billion. So why the loss? It wrote off 53% more loans than it did in the first quarter -- its Q2 credit losses totaled $810 million.

CEO Bill Styron, who ought to contribute his $38 million in gains to the bailout, is committed to raising $5.5 billion. It's just not clear how he is going to accomplish this. (Maybe taxpayers will provide the money.) But he has decided to cut dividends by 80% from 25 cents a share to 5 cents a share.

Meanwhile, since its early-July low of $3.89, Freddie's stock has more than doubled to $8.04. But somebody in market land is not happy with Styron's latest performance -- in pre-market, Freddie's stock is down 16%. Keep up the good work Bill!

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Freddie Mac securities.

Tags: featured, fre, freddie mac, FreddieMac, syron

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Reader Comments (Page 1 of 1)

8-06-2008 @ 11:00AM

Tom Gemelli said...

Run, Bill run. Nows the time time to take your $38 million and get out. Oh, on second thought, stick around the Feds will make sure you will double that amount in the next couple of years. Go, Bill, go, after all it is only fiat money provided by the taxpayers.