Countrywide Credit Industries Inc., the nation's second-largest originator and servicer of mortgages, reported it earned $80.2 million in its third quarter, a 22% increase from a year earlier.

Earnings per share for the quarter ended Nov. 30 rose 15%, to 71 cents, beating analysts' consensus estimate by a penny.

Pretax income from Countrywide's servicing sector declined 9%, to $58.4 million, because of lower interest rates. But the lower interest rates fueled a 71% increase in pretax production income, to $61.9 million.

The subprime and home equity divisions were extremely profitable. Countrywide originated $427 million of subprime and home equity loans in the quarter. Though that only represented 3% of Countrywide's total origination volume, the subprime and home equity loans accounted for 20% of pretax production profits.

"Diversification activities again played a significant role in company profitability," said Countrywide vice chairman Angelo R. Mozilo.

- Paul R. La Monica

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