Accounting error.Countrywide Financial Corp. said it overstated o·ver·state tr.v. o·ver·stat·ed, o·ver·stat·ing, o·ver·states To state in exaggerated terms. See Synonyms at exaggerate. o its 2004 results by 20 cents a share because it improperly recognized securities sales in quarterly periods when the sales were made afterward. The Calabasas-based mortgage lender said it will reduce its previously reported 2004 earnings per share to $3.63 (diluted) from $3.83. The 20 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. will be shifted into the first quarter of 2005. As a result, Countrywide increased its previously announced guidance for 2005 to a range of $3.45 to $4.45 per diluted share, from a range of $3.25 to $4.25. Countrywide will not need to restate its 2004 results because it has not yet filed its annual 10-K report for the year. Countrywide said in a press release that the error was flagged by its auditor, KPMG KPMG Klynveld Peat Marwick Goerdeler (accounting firm) KPMG Kaiser Permanente Medical Group KPMG Keiner Prüft Mehr Genau (German) KPMG Kommen Prüfen Meckern Gehen LLP LLP - Lower Layer Protocol , on Feb. 18. The mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. contained "embedded derivatives" used to hedge against extreme changes in shortterm rates and to enhance the securities' credit rating. The revision will require the company to report a "material weakness in internal controls over financial reporting" in its 10-K, Countrywide said. |
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