Accredited reported a loss of $260.2 million, or $10.29 per share, for the quarter ending March 31, after earning $35.8 million, or $1.61 per share during the same period a year ago. Analysts polled by Thomson Financial forecast a loss of $6.43 per share.Accredited has been embroiled in a legal battle with private equity investor Lone Star Funds over the potential sale of the company, with Lone Star balking at the original purchase price and Accredited seeking to force a purchase under the terms of the original contract. (Click here to see all of my previous posts on this). The San Diego, Calif.-based lender also said that it ceased all origination activity in September, the latest in a string of REIT-based lenders to do so (NovaStar and Impac also halted originations in the past week or so).
Accredited Posts First Quarter Loss, Says 'Viability' May be in Question
Accredited Home Lenders Holding Co. finally filed its 10-Q with the SEC today for the first quarter of 2007, and the results were anything but pretty: the subprime lender posted a net loss of $260.1 million and said that barring the sale of the company or other outside liquidity sources stepping in to fund operations, "financial and operational viability becomes increasingly uncertain." Most of the quarterly loss was due to large losses on the sale of mortgages, with Accredited reporting a net loss on sale of nearly $179 million for the first quarter, compared to a gain of $70.5 million in the year-ago period. The Associated Press is reporting that the second quarter loss was far worse than most analysts had expected: