Fannie Misses Mark, but Raises Dividend

Despite missing analysts' consensus earnings estimate by one penny in the second quarter, Fannie Mae has increased its dividend by six cents.Fannie Mae's net income, at $1.1 billion ($1.09 per share) was down 24.3% from that of a year earlier. However, Fannie Mae's "core earnings" painted a rosier picture. Fannie Mae reported second-quarter core earnings per share of $1.86, just shy of the consensus estimate but up 20% from that of a year earlier. Core earnings exclude unrealized losses on purchased options used for hedging. Those unrealized losses must be factored into net earnings under generally accepted accounting principles. Meanwhile, Fannie Mae has raised its dividend on common shares from $0.39 per share to $0.45 per share. Timothy Howard, vice chairman and chief financial officer of the government-sponsored enterprise, said the dividend increase "reflects management's confidence in the strength and sustainability of the cash flows of Fannie Mae's business," as well as increased investor focus on dividend payouts as a result of recent tax changes. Fannie Mae can be found online at http://www.fanniemae.com.