Countrywide Reports 3rd Quarter Loss
Sometimes a picture really is worth a thousand words. That was a screenshot from CNNMoney’s coverage of the Countrywide story where the company reported a 3rd quarter loss of $1.2 billion dollars.
$1,200,000,000 lost!
More unbelievable than the loss is the statement/belief/prayer the company has already turned around and will post a profit in the current quarter.
The Countrywide results have been eagerly awaited as many analysts consider the country’s largest mortgage servicer and originator as a barometer of the real estate market as a whole.
Countrywide’s stock leaped after the earnings result and though it lost some of its position, still showed a double digit gain. Wall Street as a whole also jumped positive, though we’ll have to wait until closing to see how permanent
those gains are.
President David Sambol remarked,
“We view the third quarter of 2007 as an earnings trough, and anticipate that the company will be profitable in the fourth quarter and in 2008,” said a statement from President David Sambol. “Over the longer term, we believe that prospects for the U.S. housing and mortgage markets, as well as for Countrywide, remain very attractive.”Do you believe this guy? Like CEO Angelo Mozilo, Sambol has also recently sold a bunch of stock. I believe him. I believe over “the longer term” U.S. real estate is a good bet. I also believe Countrywide thinks they can make a turnaround. What I don’t believe is anyone calling bottom. Bottom is something you only see in the rear view mirror. Consider the chart in the picture. In the beginning of August, you can see the stock began to rise. Was that bottom? Looking back, we know it wasn’t.
If Countrywide pulls out this quarter like they say they will and through 2008, then I’ll believe Mr. Sambol. Until then, call me skeptical.