IndyMac Reports 1Q Loss, May Not Earn Profit In 2008

New York, NY (AHN) - After posting first quarter loss, IndyMac Bancorp Inc. reported on Monday that it is likely to make money this year, but may not return to profitability quickly.

The second- biggest independent U.S. mortgage company posted $184 million loss, or $2.27 a share, compared to its profit of $52.4 million, or 70 cents a share, a year ago.

"With respect to profitability, we do not expect that IndyMac will be able to return to overall profitability until the current decline in home prices decelerates," Chief Executive Michael Perry said in a statement, according to AP news agency.

The company indicated that it expects to report subsequent losses for the rest of the quarters in 2008.

"Our overall business, excluding discontinued activities, will be close to breakeven by the third quarter and have a small profit for the second half of 2008," Perry said, according to The Wall Street Journal.

He added that a net loss from discontinued operations is expects to drop to about $23 million in the fourth quarter.

The reports said IndyMac's CEO Michael Perry is focusing on selling mortgages to government-backed Fannie Mae and Freddie Mac, which are also the only two biggest sources of money for home lenders.

Perry is also going to defer the interest on its trust preferred securities and omit some dividends on non- cumulative, perpetual preferred stock.

Earlier the company had projected that the first-quarter loss would be 50 percent to 65 percent narrower than the fourth quarter's $509.1 million, according to Journal.

While, shares of the Pasadena, California-based company were moving down by more than 3 percent to $3.27 in recent trading.

"I am confident that IndyMac will be a survivor [and that the lender] will return to prosperity with many fewer competitors," Perry was quoted saying by Bloomberg News.

The company's shares have fallen down by as much as 42 percent from the start of this year through last week. It has plunged around 93 percent after the company recorded its high two years ago.