Freddie: Losses soar, dividend slashed
NEW YORK (CNNMoney.com) -- Mortgage finance giant Freddie Mac reported a much bigger than expected second quarter loss early Wednesday and slashed its dividend, signaling continued woes for the housing and financial markets.
Freddie (FRE, Fortune 500) lost $821 million, or $1.63 a share, in the quarter. Analysts surveyed by Thomson Reuters had forecast it would trim its loss to 41 cents a share from the 66 a share loss in the first three months of the year. The company earned $729 million, or 96 cents a share, a year ago.
Provisions for credit losses more than doubled to $2.5 billion from $1.2 billion in the first quarter, due to increases in delinquency and foreclosure rates of the mortgages it owns and guarantees, along with the continued declines in home prices.
The company announced it would cut its quarterly dividend to 5 cents a share from 25 cents a share in an effort to save capital, which has been put under stress by its losses. The dividend cut should save the company a little more than $500 million a year.