Freddie Mac posted a narrower fourth-quarter loss, and the mortgage financier reported its credit-loss provisions held steady from a year ago, and even dropped sequentially.
Chief Executive Charles E. Haldeman Jr. said the company started the year with some early signs of stabilization in the housing market, with housing prices and home sales likely nearing the bottom sometime this year.
And while he said Freddie expects low mortgage rates and homebuyer tax credits will help fuel demand, Haldeman warned the recovery remains fragile, with significant risks posed by high unemployment and a potential large wave of foreclosures.
On Wednesday, Freddie said its net worth as of Dec. 31 was $4.4 billion. As a result, Freddie didn't need any funding for the period under a $200 billion commitment it received from the government to keep afloat. Freddie and its larger peer Fannie Mae were placed under conservatorship in 2008 to prevent potential implosions at the height of the credit crisis. Freddie has received nearly $50 billion thus far.
In the latest quarter, the company posted a loss of $6.47 billion, compared with a year-earlier loss of $23.85 billion. After a $1.3 billion dividend payment to the Treasury Department, the loss was $2.39 a share, compared with the year-earlier loss of $7.37. The year-earlier results were stung by $13.3 billion in mark-to-market losses on the company's derivative portfolio.
Revenue slumped 83% to $2.72 billion.
Credit-loss provisions were $7 billion, flat from a year ago but down from $8 billion for the third quarter.
Shares were up 1.7% to $1.22 in premarket trading.