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Has Netbank made a mistake?


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Poll: Has Netbank made a mistake when it bought a mortgage company? (1 member(s) have cast votes)

Has Netbank made a mistake when it bought a mortgage company?

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#1 markber

markber

    1 billion bucks

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Posted 23 September 2004 - 09:49 AM

Has Netbank made a mistake when it bought a mortgage company. It looks like mortgage business got Netbank into troubles.


************************************************************
NetBank down; puts earnings view below Street forecast

Associated Press


NEW YORK - NetBank Inc. stock closed down Friday after warning earnings would be below Wall Street's expectations.

The shares closed at $10.68, down 86 cents, or 7.7 percent, on the Nasdaq Stock Market. The 52-week low is $9.83 set Aug. 9. The stock has been trailing downward from the 52-week high of $14.83 set Jan. 14.

The Alpharetta, Ga., company offers online banking.

On Thursday, NetBank warned that competitive pricing in the market for conforming loans - which are loans that meet the qualifications set by Freddie Mac and Fannie Mae - along with low rates will push third-quarter earnings significantly below the average view among analysts for earnings of 18 cents a share.

Raymond James & Associates Inc. downgraded the stock to "underperform" from "market perform" following the company's third-quarter earnings disclosure.

Citing continuing lackluster financial performance, Raymond James analyst Michael Vinciquerra said NetBank's mortgage business is struggling more than the market, and he expects earnings to continue to weaken.

While the banking business has been stable, he said, it hasn't been growing enough to offset the sluggishness of the mortgage business.

Vinciquerra now expects third-quarter earnings of 12 cents a share, down from his prior forecast of 17 cents a share.

He expects 2004 earnings of 69 cents a share, down from 75 cents a share which is the average analyst view.

He lowered his 2005 view to 80 cents a share, down from 84 cents a share. The average forecast is 87 cents, according to Thomson First Call.

The analyst, who doesn't own NetBank stock, cautioned that NetBank faces both credit and interest rate risks in its investment portfolio.

Raymond James has an investment-banking relationship with the company.





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