Fannie Mae The largest U.S. buyer and guarantor of home mortgages reported Thursday that its profit dropped 36 percent in 2006 and said it expects higher delinquencies and credit losses this year from the turbulence in the mortgage market. The government-sponsored company, which finances or guarantees one of every five home loans in the United States, said it earned $4.1 billion, or $3.65 a share, in 2006, down from $6.35 billion, or $6.01 a share, in 2005 and $5 billion, or $4.94 a share, in 2004. The decline in profit in 2006 was expected, mainly because of reductions in interest income and ballooning costs from Fannie Mae’s reworking of its accounting following a $6.3 billion scandal that came to light in September 2004. This year, Washington-based Fannie Mae said it expects increased credit losses from its purchases of higher-risk mortgages. Such increases are likely to reduce 2007 earnings “and also could adversely affect our financial condition,” the company said.
Hewlett-Packard Co. The world’s largest personal-computer maker said third-quarter profit rose 29 percent after the company took market share from Dell Inc. Net income rose to $1.78 billion, or 66 cents a share, from $1.38 billion, or 48 cents, a year earlier, the Palo Alto, Calif.- based company said Thursday. Sales rose 16 percent to $25.4 billion in the quarter ended July 31. Excluding some costs, profit was 71 cents a share, topping estimates for the 10th straight quarter.
J.C. Penney Co. The third-largest U.S. department-store company said second-quarter profit increased 1.7 percent on the success of new clothing lines. The company lifted its annual profit forecast to $5.50 a share, more than its previous expectation of $5.49, and in line with the average estimate of 16 analysts surveyed by Bloomberg. Second- quarter profit rose to $182 million, or 81 cents a share, matching estimates. A year earlier, earnings were $179 million, or 76 cents. Sales climbed 3.6 percent to $4.39 billion.
Red Robin Gourmet Burgers Inc. The Greenwood Village-based casual dining restaurant chain reported net income of $4.9 million, or 29 cents per diluted share, in the second quarter, compared with earnings of $7.2 million, or 43 cents a share, in the comparable period of 2006. Total revenues increased 31.5 percent to $178.6 million.
