Countrywide Links Earnings Dive to B&C Ops

Countrywide Financial Corp., Calabasas, Calif., has reported net earnings of $434.0 million ($0.72 per share) for the first quarter, a 37% decline from $683.5 million ($1.10 per share) in the first quarter of 2006 that the company attributed largely to its subprime operations.Mortgage banking revenues from subprime operations plummeted approximately $400 million in the first quarter from those of the fourth quarter, $245 million of the total from production revenues and $155 million from investments, the company reported. Pretax earnings by the company's mortgage production sector overall were off by more than 50% from those of a year earlier, falling from $284 million to $139 million. The loan servicing sector recorded a pretax loss of $69 million, compared with net income of $249 million a year earlier, the company said. "Excluding the impact of subprime conditions and increased credit costs in the quarter, Countrywide's core operations made strong contributions to quarterly earnings," said Angelo R. Mozilo, the company's chairman and chief executive officer. "Our production sector delivered strong volume and margins for both prime first and home equity loans, which accounted for 93% of our total mortgage banking operations." Countrywide can be found online at http://www.countrywide.com.