Fannie Mae Posts $3.6 Billion Loss

Fannie Mae <FNM.N>, the largest provider of financing for U.S. home loans, on Wednesday reported a $3.6 billion quarterly loss as the housing slump deepened, sending its shares to a 12-year low.
The government-chartered company posted a $3.80 per share net loss for the fourth quarter. That compares with a profit of $604 million in the year-earlier period and a $1.52 billion loss in the third quarter.
Analysts expected the company would post a fourth-quarter loss of $1.39 per share, according to Reuters Estimates.
A sharper-than-expected drop in home prices that first sparked a crisis in subprime lending has since tainted the entire U.S. housing market, hurting Fannie Mae and rival Freddie Mac <FRE.N>.
Rising delinquencies and foreclosures have led the companies to write down values of mortgage securities they own and increase reserves to cover their guarantees of payment on bonds held by investors.
Credit-related expenses soared to $3 billion last quarter from $326 million in the same period for 2006. Revenue rose 8.6 percent to $3.1 billion, driven by a 26.4 percent increase in guaranty fee income.

Nortel cutting 2,100 jobs

Nortel Networks, the Canadian telecommunications equipment company, announced Wednesday it is cutting 2,100 jobs and transferring 1,000 after posting a fourth-quarter loss of $844 million US.
It's just the latest staff cut at the Toronto-based company, which has slashed tens of thousands of jobs since the dot-com balloon broke and endured a major accounting scandal.
The big loss follows a one-time charge of $1.06 billion US for the valuation allowance against a Canadian deferred tax asset.
Revenue in the quarter was $3.2 billion, down four per cent, and $10.95 billion for the full year, also down four per cent.
© The Canadian Press