Interest Rate Roundup

Tuesday, December 11, 2007

Some more warnings ...

Last night, it was Washington Mutual. This morning, more credit crisis casualties are 'fessing up about problems in their businesses...

* H&R Block said it lost $136 million, or 42 cents per share, in the fiscal second quarter. That's worse than the year-ago $121 million, or 38 cents per share, and worse than the 35-cent estimate of analysts. That's a continuing operations loss, by the way. H&R Block is in the process of shutting down much of its Option One subprime mortgage business. Including discontinued ops (such as $252 million in losses on the sale of whole mortgage loans), the company's net loss more than tripled.

* Genworth Financial, formerly part of GE, said it'll miss 2008 profit forecasts do to housing-related losses. It's expecting operating earnings of $2.65 a share to $3.10 a share, below the average estimate of $3.28 a share. Genworth is the nation's fifth-largest mortgage insurer. Said CEO Michael Fraizer: "We did not expect the speed or degree of the unprecedented turn of the housing market."

Meanwhile, in early trading, shares of Washington Mutual are getting whacked, down almost $2. But all is not necessarily grim. Many troubled institutions have been successful at getting capital infusions -- albeit at a high cost. And it looks like pieces of more U.S. banks could potentially be sold off to cash-rich foreign buyers, if you believe some of the comments coming out of the Middle East region.


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