Posted on 07/26/2008 3:30:14 PM PDT by 2ndDivisionVet
Wachovia Corp, the fourth-largest U.S. bank, on Tuesday posted an $8.86 billion second-quarter loss, slashed its dividend and announced 6,350 job cuts after losses tied to mortgages soared.
Its shares fell $1.67, or 12.7 percent, to $11.51 in premarket trading.
The net loss for the Charlotte, North Carolina-based bank equaled $4.20 per share, and compared with a profit of $2.34 billion, or $1.22, a year earlier.
Excluding items, the loss was $1.27 per share, compared with the average analyst estimate of $1.30, according to Reuters Estimates.
"These bottom-line results are disappointing and unacceptable," Chairman Lanty Smith said in a statement. "While to some degree they reflect industry headwinds and weaker macroeconomic conditions, they also reflect performance for which we at Wachovia accept responsibility."
Results included a $6.06 billion write-down of goodwill and reflected a $4.19 billion increase in reserves for bad loans.
They also included a $975 million charge related to its tax treatment of leveraged leases, $936 million of losses tied to disrupted capital markets, a $590 million charge for other legal matters, and $391 million of losses on securities sales.
Wachovia slashed its quarterly dividend 87 percent to 5 cents per share from 37.5 cents, and has now lowered it 92 percent this year.
JOB CUTS
The job cuts will affect more than 5 percent of the bank's roughly 120,000 employees. Wachovia also said it will eliminate 4,400 jobs and contracting positions that are now open.
Wachovia said it cut 2,000 jobs at its retail mortgage operations through June, and plans to eliminate 4,400 more in the next year.
(Excerpt) Read more at moneynews.newsmax.com ...
Something wrong with those numbers. Stock 14.42 after several days.
Heh. I just applied for a mortgage to them- and got turned down.
This was reported earlier in the week. They took on a mortgage company and got burned. They should be okay, I hope, because I have be doing business with “Watch-over-ya” (cause they watch over your money) for 25 years.
Their stock went up this week and, it’s s long climb, but the shareholders seem to approve of the action of new CEO to absorb the hit.
I was pleased to see the shares creeping back up from single digits the week before.
I'm wondering if enough of the loans go bad, then, will the pressure on the govt. from business interests for shamnesty go away?
Cheers!
The statement no longer has any meaning. Who is we? What does taking responsibilty mean? It usually means 10,000 peons get layed-off, retirement funds get rifled, and the board of directors get a bonus.
Oh please let my CD expire first. I’ve already done my time with the FDIC and IndyMac this month.
Just another evil corporation--they should all be owned and run by the feds. That would make everything better. Amen.
Just more words from a sharp in a suit.
I just found out my mortgage company (CIT, a fairly large company) is bankrupt and I now have a mortgage with an unknown company.
I can’t deny I’ve increased my WB holdings in the past few weeks while the stock was plummeting. Wachovia did the right thing by preparing Wall Street for the bad news. By the time they released their 2Q report, all the bad news was already out there. No surprises, except for the absolute number for RIF and a simultaneous drop in oil prices.
ROFL! Are you another one of FR's token liberals that are kept around for amusement?
Have no fear, you will be notified posthaste where to send the next payment. ;o)
So what happened? People overreacted to Freddies-Fanny and financials dropped as people bailed out. However, for many finanacials, the fundamentals were solid enough to recognise it as a panic selloff and people picked up shares at bargain prices.
Should you and I see our tax money used to bail out greedy partners who ignored all the red flags and made loans to people who never had the ability to pay them back? No. The borrowers bought ARM's with no money down in hopes of flipping the house before the ARM came due. The lenders thought the liberal terms would increase business (which it did) and thought the continually-rising real estate market would cause refinancing and more fees when the ARM came due. This was a private transaction and I can't believe Congress approved bailing these parties out with public money. The whole lot should be tarred and feathered, then thrown out of office.
FDIC closed a couple of small banks (Calif and Nevada) yesterday.
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