Calabasas, California-based Countrywide Financial Corp. reported a net earnings loss of approximately $188 million between the final quarter of 2006 and the first quarter of 2007, according to the company’s 2007 first quarter report. The decline was a direct result of the company’s net earnings dropping from $622 million in the final quarter of 2006 to $434 million in the first quarter of this year.
When commenting on the company’s latest financial results, Countrywide Chairman and Chief Executive Officer Angelo R. Mozilo said, “Countrywide’s earnings for the first quarter of 2007 were $434 million, despite adverse subprime and housing market conditions. While the company’s core operations delivered what was otherwise a strong quarter, earnings were impacted by charges relating to our subprime activities as well as increases to our loss reserves and related asset valuation adjustments stemming from higher delinquencies and softer housing markets.”

The company’s latest quarterly report also delves into the negative impact of the subprime fallout. In it’s stated earnings, Countrywide said subprime operations fell $400 million between the fourth quarter of last year and the first quarter of 2007. In addition, revenues from subprime investments fell $155 million, and other subprime-related credits costs increased $132 million in the first quarter due to an upswing in delinquencies, deteriorating housing market conditions, and increased loss reserves.
Despite the changes in the subprime market, Countrywide’s leadership remained positive about the company’s long-term growth strategy.
“While turbulent mortgage market conditions had an adverse impact on the company’s first quarter, looking forward, management is optimistic about the long-term future growth prospects and profitability of the company stemming from the consolidation and rationalization occurring in the residential mortgage markets today,” added Mozilo.
Click here to view Countrywide’s full First Quarter 2007 report.