CHARLOTTE, North Carolina - July 22, 2008 - Wachovia Corp.
reported a surprisingly large second-quarter loss Tuesday, deflating Wall
Street's hopes that the nation's big banks are weathering the credit crisis
well. The nation's fourth-largest bank by assets said it lost $8.86 billion, is
slashing its dividend and eliminating 10,750 positions after losses tied to
mortgages soared.
Even excluding one-time items, the results substantially missed Wall Street estimates.
"These bottom-line results are disappointing and unacceptable," Chairman Lanty Smith said in a statement. "While to some degree they reflect industry headwinds and weaker macroeconomic conditions, they also reflect performance for which we at Wachovia accept responsibility."
Wachovia said it lost the equivalent of $4.20 per share in the April-June period. In the same timeframe last year, the bank earned $2.34 billion, or $1.22 per share.
Excluding $6.1 billion in write-downs to the value of its intangible assets and merger-related and restructuring charges of $128 million, Wachovia lost $2.67 billion, or $1.27 per share. Second quarter results include the bank's October acquisition of A.G. Edwards Inc.