Reply #28: Freddie sees lower 2005 income, net could change

[UpInArms]

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx...

WASHINGTON, March 31 (Reuters) - Freddie Mac, still recovering from a 2003 accounting scandal, on Friday said an estimate of the capital it held at year-end implied 2005 net income of $2.5 billion, down nearly 11 percent from 2004.

But profits will be cut by $200 million due to adjustments, and could change materially before the mortgage funding company posts final 2005 results in May, Freddie Mac <FRE.N> said.

In a preliminary look at its 2005 business, Freddie said its total mortgage portfolio grew 12 percent to about $1.7 trillion and its share of the mortgage securitization market run by the government-sponsored enterprises (GSEs) rose to 45 percent from 41 percent in 2004.

<snip>

Freddie's earnings have not been current since accounting problems that led to a $5 billion profit restatement and management overhaul. Earlier this month, the company said it would delay by two months the release of quarterly and full-year 2005 results to implement an accounting change.

<snip>

But final results could differ materially from the profit implied by its regulatory core capital, the company said. Further, the implied net income does not include the impact of the accounting change announced earlier this month.

...more...