Countrywide to Cut 500 Million in Costs

Countrywide Financial Corp. has announced plans to cut $500 million in costs over the next year.

The goal is to drive down redundancy expenses by about half a billion dollars over the next 12 months, said CEO Angelo Mozilo during a conference call.

Mozilo did not indicate where the cuts will take place, nor did he say how many jobs will be eliminated.

At the end of 2005, the company employed 54,456 workers.

However, Mozilo did not say that the possible purchase of National City'ss First Franklin Financial subprime loan unit is at risk from the cutbacks.

Countrywide reported a second quarter profit increase of 27%, partly due to improvement in non-mortgage areas of the company.

Countrywide predicts a 16.7% to 17% market share of US mortgages next year, down from the original outlook of 18% to 18.5%. However, profits are expected to be $4.00 to $4.80 per share, up slightly from the previously predicted $3.90 to $4.80 per share profit.

Monthly production for June was 224,842 loans for a total of $42 billion, slightly more than May. Subprime fundings increased $0.3 billion to $4.1 billion.

The company reported 65 billion loans at the end of June.

Quarterly net income increased to $1.15 per share, or $722.2 million, up from $0.95 per share one year ago.

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