Excluding merger costs and restructuring charges, the Winston-Salem, N.C.-based bank’s earnings were up about 4 percent to $270.2 million, or $1.32 a share. Including the charges, Wachovia earned $205.3 million, or $1.00 a diluted share, in the third quarter. That compares with reported net income of $257.5 million, or $1.25 a share, a year ago.
Wall Street was expecting the company to post operating earnings of $1.32 a share, according to market research firm First Call/Thomson Financial. Wachovia, which is the process of cutting 1,800 jobs as it revamps its operations, said pre-tax restructuring charges and merger-related costs totalled $99.8 million in the third quarter. The bank said the rest of the restructuring charges, about $30 million, will be taken in the next two quarters.
Wachovia’s provision for loan losses in the third quarter was $124 million, up from $76.8 million during the same period last year. Net interest income, after the provision for loan losses, fell 6 percent to $506.8 million.
The bank holding company in June warned investors that rising interest rates would hurt second-quarter and full-year profits. In September it said its president and chief operating officer, G. Joseph Prendergast, would retire after the end of this year.
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Visteon Earnings Fall
Third-quarter earnings at auto parts supplier Visteon Corp. fell 69 percent due to price and production cuts by its former parent, Ford Motor Co.
Visteon said its earnings totaled $48 million, or 37 cents a share, for the three months ended Sept. 30, compared with $155 million, or $1.19 a share, in the year-ago period.
The results equaled Wall Street expectations that Visteon had lowered in August, according to analysts surveyed by First Call/Thomson Financial.
Revenues fell 4 percent, from $4.6 billion to $4.4 billion.
Visteon attributed the earnings decline to a 5 percent price cut given to Ford before being spun off as a separately traded company. Ford accounted for 83 percent of Visteon’s business in the third quarter, Visteon’s first full quarter on its own since the spinoff in June.
Visteon also was hurt by the shutdown at three Ford factories to shift tires from new cars to replacing 6.5 million recalled Firestone tires. The parts maker also said the weakness of the euro against the dollar dragged on profits as well.
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