New Century Plunges

Updated from Feb. 7

New Century Financial (NEW Quote) sank 24% early Thursday after warning of an unexpected fourth-quarter loss.

The Irvine, Calif., subprime lender cited "the increasing industry trend of early-payment defaults." New Century expects to post a fourth-quarter loss, where Wall Street analysts were looking for a profit of $1.08 a share.

The company also "expects to record a fair value adjustment to its residual interests to reflect revised prepayment, loss and discount rate assumptions with respect to the loans underlying these residual interests, based on indicative market data."

New Century will also restate earnings for previous 2006 periods to fix its accounting for allowance for loan repurchase losses. The restatements will cut earnings in previous periods, the company said.

Shares plummeted $7.36 to $22.80.