LENDER HITS ITS STRIDE IN Q4 COUNTRYWIDE LEAPS OBSTACLES.

Byline: Gregory J. Wilcox  Staff Writer

CALABASAS - Countrywide Financial Corp. reported Tuesday that fourth-quarter earnings skyrocketed 121 percent as the company's broad portfolio of businesses helped offset a cooling in the refinance market.

The company also reported that full-year earnings had nearly tripled as interest rates, which were below 6 percent for most of the year, fueled a record number of refinancings for the mortgage industry and enticed buyers into the residential real estate market.

Countrywide also set a number of financial records during the year.

In the year's final three months, Calabasas-based Countrywide earned $563.7 million, equal to $2.74 a share, up from earnings of $254.9 million, $1.45 per share, for the similar period a year ago. The per-share earnings in the fourth quarter were the second highest ever.

Revenues totaled $2.11 billion versus $1.4 billion in the final quarter of 2002.

Purchase volume increased an annual 33 percent during the quarter and helped offset a decline in refinance activity.

Angelo R. Mozilo, the company's chairman and chief executive officer, said during a conference call that the numbers added up to an ``extraordinary year.''

For all of 2003, Countrywide earned a record $2.37 billion, a 182 percent increase over net earnings of $841.8 million the year before. On a per-share basis, Countrywide earned $12.47 in 2003, up 156 percent from $4.87 a share in the prior year.

Revenues grew by 87 percent to $8.45 billion.

Countrywide also reaffirmed its expectation per-share earnings this year would be between $9 and $12.

``The fourth quarter was an exceptional quarter on many fronts,'' Mozilo said. ``Our strategic focus on mortgage banking, complemented by our diversification efforts in related businesses, has positioned us for strong performance even in today's rapidly changing environment.''

During the fourth quarter, loan production volume totaled $76 billion, down from $102 billion a year ago and in line with expectations. Countrywide's servicing portfolio rose to a record $645 billion, up nearly $200 billion from last year.

In response to the cooling refinance market, Countrywide has cut staffing in its processing areas by 11 percent, most of them contract positions.

The company is continuing to increase commission sales positions, though.

``In the post-boom world, we believe the continuing industry consolidation is a great opportunity for Countrywide, as many high-quality people throughout the industry will see advantages of joining the winning team ... where the strategy is to continue to pursue market share,'' Mozilo said.

Matthew Park, an analyst at A.G. Edwards & Sons Inc. in St. Louis, said that things still appeared to be humming along for the industry into the first quarter.

``I think they had pretty resilient earnings,'' Park said. ``They met our expectations on the bottom line, and their margins seem real robust, given how much volume has fallen.''

There had been speculation that, after the refinance boom ended, the sector would hit a cliff and slide into an abyss. ``From a fundamentals perspective, things are not going to be a bleak as we would have thought. From that perspective, we're being more optimistic for the near term,'' Park said.

Gregory J. Wilcox, [phone]

greg.wilcox(at)dailynews.com