Westcorp, Subsidiary Expect Earnings Drop
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Westcorp and its auto loan subsidiary, WFS Financial Inc., said Friday they’re lowering their third-quarter earnings expectations because of the slowing economy.
Westcorp expects to earn 22 cents a share, down from 57 cents a share a year earlier, and WFS Financial expects to earn 26 cents a share, compared to 61 cents a share a year earlier, the Irvine companies said in separate statements. Analysts had estimated earnings of 35 cents a share for Westcorp and 50 cents a share for WFS, according to a survey by Thomson Financial/First Call.
A rise in bankruptcies and repossessions, along with lower wholesale auction prices for automobiles, is leading to higher credit losses, said Westcorp, a financial-services holding company.
Credit losses in the third-quarter are expected to be about 2.5% and may rise to 3% in the fourth quarter, Westcorp said.
Westcorp shares fell 7 cents to $16.44. Shares of WFS Financial fell $1.31 to $15.19. The news was released after the close of U.S. markets.
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