Sallie Mae Profit Plunges, Stock Slips 8%

(RTTNews) - Student education loan provider SLM Corp. (SLM), known as Sallie Mae, Wednesday reported a plunge in profit for the fourth quarter, hurt largely by higher operating costs and fewer gains compared to last year.

Newark, Delaware-based Sallie Mae's fourth-quarter profit dropped to $19.7 million or $0.03 per share from $60.2 million or $0.14 per share last year. The year-ago quarter results included gains on sales of securities of $63.8 million.

Excluding special items, core earnings for the quarter dropped to $19.8 million or $0.03 per share from $60.5 million or $0.14 per share a year ago.

Analysts polled by Thomson Reuters expected the company to earn $0.05 per share for the fourth quarter. Analysts' estimates typically exclude special items.

Net interest income for the fourth quarter rose 23 percent to $150.7 million from $122.2 million a year earlier, while non-interest income fell to $12.3 million from $79.4 million last year. Provision for loan losses rose to $30.5 million from $29.3 million last year.

Total expenses for the quarter rose to $88.4 million from $75.6 million last year.

Loan originations increased 7 percent to $557 million in the fourth quarter, while Sallie Mae's private-education loan portfolio rose 27 percent to $8.2 billion in 2014.

Looking forward, the company has forecast 2015 core earnings of $0.48 to $0.50 per share. Analysts currently expect earnings of $0.62 per share for 2015.

Sallie Mae also said it expects private-education loan originations of $4.3 billion for 2015.

SLM closed Wednesday's trading at $9.69, up $0.06 or 0.62%, on the NYSE. The stock further dropped $0.75 or 7.74%, in the after-hours trade.