Fannie Misses Estimates, Slashes Dividend

Stock drops 12% in early trading
By Kevin Spak,  Newser Staff
Posted Aug 8, 2008 8:37 AM CDT
In this 2007 file photo, the Fannie Mae building in Washington is seen.    (AP Photo)
camera-icon View 3 more images

(Newser) – Fannie Mae reported its fourth straight losing quarter today, Bloomberg reports, coming in $2.3 billion in the red and slashing its dividend. The $2.51-per-share loss far exceeded the 72-cent average predicted by analysts, much as Freddie Mac surprised investors two days ago. “Neither of these companies have properly provisioned for what we're heading into,” said one analyst. “This thing is going to get worse and last longer and deeper than they originally thought.”

Fannie shaved 5 cents from its dividend, bringing it to 25 cents per share. Investors sent the stock down 12% in early market trading; both Freddie and Fannie have fallen more than 80% this year. The analyst believes each will need to raise up to $15 billion in new cash to keep going.