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Sallie Mae's 2Q Profit Falls 71 Percent

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Jul 23, 2008 5:31 pm US/Eastern

Sallie Mae's 2Q Profit Falls 71 Percent

RESTON, Va. (AP) ― Sallie Mae says its second-quarter profit fell 72 percent as funding costs remained high amid further weakening in the credit markets.

Sallie May says it earned $266 million, or 50 cents per share, during the second quarter. It earned $966 million, or $1.03 per share, during the year-ago period.

Sallie Mae's "core" earnings were $156 million, or 27 cents per share, in the second quarter.

Analysts polled by Thomson Financial, on average, forecast earnings of 40 cents per share for the quarter.

Core earnings exclude treatment for student loans bundled together as securities and derivatives, the complex financial instruments used as a hedge against interest rate swings.

Shares of Sallie Mae rose 51 cents, or 2.7 percent to close at $19.09, then rose 11 cents in after-hours trading.

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