WaMu: Housing Slowdown Driving Down Profit
In the past, we have drawn attention on Seattle Bubble to cutbacks or other unpleasant news for local mortgage-related businesses. The reason for this is to draw attention to the fact that the national slowdown in housing is having negative local effects here in the Seattle area. With that in mind, I thought I should probably mention today's Washington Mutual news.
Seattle-based Washington Mutual blamed a 9 percent drop in its third-quarter profit Wednesday on a slowdown in its mortgage business.It is important to note that $748 million is still an awful lot of money. I'm not trying to say that WaMu is in dire straights, I'm just pointing out that Seattle's economy is most certainly tied to nationwide events. If housing (or the economy as a whole) takes a serious downward turn nationwide, Seattle will not be unscathed. We're not that special.
The drop was more severe than Wall Street analysts had expected, and shares of WaMu stock fell $1.70, or 3.89 percent, to $42.01 in after-hours trading.
...
WaMu has eliminated nearly 10,000 jobs in the past year as it tries to become more profitable.
"The housing market is clearly weakening, with the pace of housing price appreciation slowing in most regions of the country," Chief Executive Kerry Killinger told analysts and investors in a Wednesday conference call, held after the close of regular trading.
"We are also experiencing somewhat higher delinquencies and loan losses," he said.
WaMu reported a profit of $748 million, or 77 cents a share, for the July-through-September period. That was down from $821 million, or 92 cents a share, a year ago, marking the second consecutive quarter in which WaMu has failed to report a profit increase.
Analysts had been expecting a profit of 93 cents a share, according to a poll by Thomson Financial.
"Patience is running out," said Fred Cannon, an analyst at Keefe, Bruyette & Woods. "2007 is really going to be a watershed for the company."
(Amy Martinez, Seattle Times, 10.19.2006)
5 comments:
I don't give a rip if darren posts, no big deal, but dude... come on, you know how to add links when you post? please, the endless quotations are nauseaus...
Grivetti's got a point.
There's no good reason to paste an entire article in a comment. Use links.
Example:
<a href="http://yourlinkhere.com/">linked text</a>
If that's too tough for you, just stick it into TinyURL.com and paste the generated link in plain text.
Furthermore Darren, I'm not in the habit of deleting comments just for the heck of it, but almost every single one of your comments has been wildly off-topic and rambling. The purpose of this post was to point out the fact that the housing slowdown affects Seattle businesses. I fail to see how a diatribe about WaMu's assets and a nearly 1,000-word press release have anything to do with this post.
If you're going to post, try to at least stay on topic.
It's interesting that at the same time that WaMu is selling their Mortgage Service Operation to Wells Fargo (basically all their standard, "old school" mortgages), they're buying up subprime lenders. Here's an article on it. I'd post the whole article, but I'm tired of scrolling.
Personally I don't think snapping up subprimes is a way to go during an obvious nationwide housing slowdown, with the Fed freaked out enough about inflation to do something nutty, and foreclosures on the rise (though still relatively low; but then foreclosures are a lagging indicator in a housing bust).
Say, didn't Ford, GM, United, US Air, and a slew of other mis-managed businesses have a lot of assets at one time?
Darren,
See this is a great example of the problem I have with your comments. Did you even read my post? You said "In your article you also made a point to bring out the loss of $748 Million dollars." But in reality, the article I posted said: "WaMu reported a profit of $748 million."
So I still don't see how a lengthy diatribe about WaMu's assets is relevant
Sorry sport, my problem with your posts is exactly what I have been saying.
1) Excessively long cut-and-paste jobs. (If you have been paying attention, I have asked other people—that I agree with—to cut back on that same practice.)
2) Poor grammar makes your posts difficult to follow.
3) Your replies are often unrelated to the actual post, and seem to be more about pushing whatever your personal agenda is.
4) Your posts do not appear to be coherent arguments, but rather a random stream of miscellaneous and disjointed thoughts about how wrong it is to believe in any sort of a bubble.
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