Fannie Mae Quarterly Net Income Drops 25%
Fannie Mae, the largest source of mortgage financing in the U.S., said its second-quarter earnings fell 25% as the value of financial contracts used to hedge against interest rate swings declined $1.88 billion. The shares fell on investor concern that earnings growth may lag estimates.
Net income at the government-sponsored enterprise fell to $1.1 billion, or $1.09 a share, from $1.46 billion, or $1.44, a year earlier, Fannie Mae Chief Executive Franklin Raines said. Accounting for so-called derivatives has reduced net income at the Washington-based company for six straight quarters.
Fannie Mae shares fell $2.32 to $69.06 on the NYSE.
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