Despite posting earnings that barely beat an analyst consensus - one that had been reduced four times - Countrywide Credit Industries has shown remarkable adaptability and performance in a challenging business environment, some analysts say.

Higher interest rates have hurt the entire mortgage business. The Calabasas, Calif., mortgage bank's earnings for the quarter that ended Feb. 29 were off 2% from the same period last year.

Countrywide on Friday reported earnings of $99.8 million and earnings per share of 87 cents, up 1.16%, in its fiscal fourth quarter. Subtracting a $25 million nonrecurring gain from a corporate reorganization that accounted for 22 cents per share of those earnings, Countrywide beat the consensus by just 1 cent, at 65 cents a share.

However, the company also posted a 6% increase in net revenues for the 12 months that ended Feb. 29, compared with a year earlier.

"Home equity and subprime loans boosted volumes and drove an increase in the gain-on-sale margin," said Angelo R. Mozilo, chairman and chief executive officer of Countrywide. Adding to volume were some noncore loan products and loan closing services, such as reinsurance and lender-paid mortgage insurance. A spokes-man said diversification through financial services is and will be key to Countrywide's success.

"Few lenders can match Countrywide in terms of scale, service, and creativity," said Kenneth Posner, an analyst for Morgan Stanley Dean Witter, contending that the company's willingness to test to products and move into new businesses sets it apart. "I believe they are the industry leader."

Several analysts said Countrywide's use of the Internet is starting to pay off. Nick Karris, mortgage analyst for Gomez Advisors, said Countrywide is one of the few companies that has effectively integrated the Internet into its overall strategy. He said the "bricks and clicks" model for mortgage lending, which Countrywide has employed, has the best chance for success.

"Countrywide is on the forefront and is developing with the Internet," said Thomas R. Hain, a vice president at Lehman Brothers, who called its Internet strategy the superior model. Countrywide "has a distinct advantage over pure-play bricks and mortar and pure-play Internet lenders, because it can move its customers back and forth between the Internet and bricks-and-mortar."

Nonetheless, the company's stock price has behaved like that of any other mortgage company. After trading at more than $50 for much of 1998, Countrywide's stock slid to just above $20, where it traded just two weeks ago. Though the stock jumped toward $30 in the last 10 days, it still lies well below the value that investors and officials say the company deserves.

The drag on mortgage stocks that came with higher interest rates has been exacerbated by investors' love affair with technology-related companies. Countrywide, several analysts say, should be given credit for navigating the treacherous market waters of the last 18 months still growing and making a profit.

"I'm frustrated - with all the success this company has seen - that the market only gives it the value it does," said Tom McIntyre, president of Dessauer & McIntyre Asset Management, a shareholder.

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