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[QUOTE]Originally posted by Jo4321: [QB] UPDATE: First Marblehead Swings To 3Q Loss On Write-Downs> FMDLast update: 5/8/2008 4:28:28 PM DOW JONES NEWSWIRES First Marblehead Corp. (FMD) swung to a fiscal third-quarter loss Thursday as the company remained unable to complete a single securitization transaction - previously its major source of revenue. The results came in well below analysts' expectations, sending First Marblehead's shares down in after-hours trading. The student loan lender company reported a net loss for the quarter ended March 31 of $229.6 million, or $2.36 a share, compared with year-earlier net income of $71.2 million, or 75 cents a share. The latest results included a $315 million write-down on the fair value of the company's service receivables. The company reported negative revenue of $251.8 million because of the write-downs. The mean per-share loss estimate of analysts polled by Thomson Reuters was 36 cents on revenue of $26 million. "Our earnings this fiscal quarter were disappointing and affected by the continued disruption in the capital markets and the challenging consumer credit cycle," said Chief Executive Jack Kopnisky. "However, we recognize that the demand for private student loans and other services continues to be very strong." Kopnisky added that the company has "taken a number of actions to reposition its business model in light of the current environment." The company originated $1 billion in student loans during the quarter, up 19% from a year earlier. First Marblehead like many companies in private student-loan industry has been left scrambling for capital in the credit crunch. The company depends on securitizations of student loans for most of its revenue, but it hasn't been able to put together a new package of loans since September. As a result, its shares have fallen 76% this year. Loans available for securitization were up 19% at $1.04 billion. Earlier this month, the company said it slashed it work force in half - hoping to trim operating costs by $200 million amid what it called "an extraordinarily challenging business environment." Last month, First Marblehead effectively lost two big partners when Bank of America Corp. (BAC) stopped making private student loans, and Education Resources Institute Inc., which provided First Marblehead's borrower default guarantees, filed for bankruptcy. First Marblehead shares closed Thursday at $3.72. Shares recently changed hands at $3.49 in after-hours trading. -By Andrew Edwards, Dow Jones Newswires; 201-938-5973; Andrew.Edwards*dowjones.com (END) Dow Jones Newswires [/QB][/QUOTE]
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