Surprise: Freddie '03 Results Coming in Mid-'04

Freddie Mac surprised the market Friday morning by revealing that it will not release any quarterly or annual results for 2003 until mid-year 2004.A few days ago, company officials said 2003 quarterly earnings would likely come on the heels of its earnings restatement for the 2000-2002 period. (On Friday morning Freddie Mac restated upward its cumulative earnings for 2000, 2001, 2002, and certain prior periods by $4.9 billion. See item above.) But on Friday Freddie Mac revealed for the first time that 2003 earnings will not come until June 30 of next year, blaming the delay on the complexities surrounding its earnings restatement process, and building a new accounting infrastructure within the $600 billion company. "There were a lot of accounting mistakes made," Freddie Mac executive vice president of finance Marty Baumann said during a morning news conference. The company also estimated that it has spent at least $100 million in regard to the massive reaudit, a project that includes fixing its accounting infrastructure and hiring and firing employees. MortgageWire estimates that at least 15 company employees have been fired by management in regard to its earnings restatement scandal.