Federal Home Loan Mortgage Corp (OTCBB:FMCC) stock suffered some loss after the housing company posted net income, which was steeply down year-over-year. The company reported $524 million net income in the first quarter, significantly down from $4 billion net income that it posted in the first quarter of 2014. The company cited losses from investments it used to hedge interest rates swing as a reason for the decrease in the net income.
The report brief
Overall, the earnings of the company improved quarter-over-quarter as the company had recorded $227 million in net income against $8.6 billion achieved in the previous year’s fourth quarter. However, the quarterly results marked the 14th consecutive profitable quarter for the government-backed housing company. Federal Home Loan Mortgage Corp (OTCBB:FMCC) said that despite volatile earnings, its fundamentals remain strong. At the same time, the company disclosed that it will pay a dividend of $746 million to the Treasury Department in June.
The company’s total dividend payments to the government amount to $92.6 billion, which is higher than the bailout of $71 billion itself. As per the statement, Federal Home Loan Mortgage Corp (OTCBB:FMCC) sustained losses to the tune of $2.4 billion in the first quarter.
The first quarter results came alongside the stress test results announced by the FHFA. As per the report, Federal Home Loan Mortgage Corp (OTCBB:FMCC) will require anywhere between $34.4 billion to $62.3 billion during severe global or domestic recession.
The results are highly encouraging and showed improvement from the last year’s stress test results. As per the last stress test results, the housing company needed in between $49.9-$92.8 billion in order to survive a financial crisis.
The stock of Federal Home Loan Mortgage Corp (OTCBB:FMCC) was marginally down by 0.71% to $2.79 during the last trading session, when nearly 2.37 million shares recorded trade.