Nelnet posts sixfold jump in 2nd-quarter profit on higher fees for servicing loansBy AP
Monday, August 9, 2010
Nelnet 2Q profit jumps sixfold on loan servicing
LINCOLN, Neb. — Nelnet Inc. said Monday its second-quarter profit rose sixfold on higher revenue from servicing student loans for the government.
The student loan provider and processor said its net income leaped to $50 million, or 99 cents per share, from $8.2 million, or 16 cents per share, in the year-ago quarter. Adjusted for certain one-time items, the company said its operating income rose to $58.4 million, or $1.17 per share.
That easily topped analysts’ average estimate of 96 cents per share according to a Thomson Reuters poll.
Net interest income, or money earned from loan and investment interest, surged to $97.4 million from $57.1 million.
Fee-based revenue from the company’s payment processing and enrollment services businesses climbed 19 percent to $48.2 million during the quarter. As of June 30, the company was servicing $12.9 billion of loans for 1.5 million borrowers on behalf of the Department of Education under a contract that began in September.
Net student loan assets were $26.7 billion, including $2 billion of federal student loans classified as held for sale. The loans held for sale are expected to generate a pretax gain of $30 million to $33 million when they are sold to the Education Department during the fourth quarter.
Nelnet set aside $6.2 million to cover defaulted loans during the quarter, down from $8 million a year earlier.
Nelnet shares rose 89 cents, or 4.4 percent, to close at $20.94.
Tags: Lincoln, Nebraska, North America, United States