Freddie Mac's First Quarterly Gain In 2 Years Attributed To Cost Savings
WASHINGTON -- Freddie Mac reported earning $676 million in the January-March quarter, the first time the bailed-out mortgage giant has posted a quarterly gain in nearly two years.
The government-controlled company requested no additional federal aid after receiving $13 billion over the past four quarters.
CEO Charles Haldeman attributed the net income to cost savings but did not elaborate.
The government rescued McLean, Va.-based Freddie Mac and sibling company Fannie Mae from the brink of failure in September 2008. The government estimates the bailouts will cost taxpayers as much as $259 billion.
But even with the net income gained, Freddie Mac posted a 29-cent per share loss attributable to common stockholders. That's because the loss takes into account $1.6 million in dividend payments to the government. That compares with a loss of $1.7 billion, or 53 cents a share, in the October-December quarter.
Analysts were quick to caution that the company's one-time gain was scant when compared with years of losses. The last time Freddie Mac posted a quarterly gain was the April-June quarter of 2009. They said they don't expect Freddie to report sustained earnings this year.
"This is not necessarily a climb to ongoing profit," said Jim Vogel, a debt strategist with FTN Financial Capital Markets. "They still have a long way to go."
Fannie and Freddie own or guarantee about half of all mortgages in the U.S., or nearly 31 million home loans worth more than $5 trillion. Along with other federal agencies, they backed almost 90 percent of new mortgages over the past year.
Fannie and Freddie buy home loans from banks and other lenders, package them into bonds with a guarantee against default and sell them to investors around the world.
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By DEREK KRAVITZ 05/ 4/11 05:12 PM ET Associated Press