DES MOINES, Iowa (AP) ¿ Shares of First Marblehead Corp. fell Tuesday after the company reported a fiscal fourth-quarter loss, and an analyst expressed concern over future loan losses.
The Boston-based company, which packages student loans for sale to investors, reported a net loss for the quarter of $36.1 million, or 36 cents a share, compared with a loss of $56.7 million, or 57 cents per share, in the year-ago period.
FBR Capital Markets analyst Matt Snowling reiterated his "Market Perform" rating and set a share price target of $2.50.
He said there is long-term value in the company's loan platform, but First Marblehead is expected to take further losses on loans held at the bank while using up cash until it can access the financial markets."As a result, we remain neutral on (First Marblehead) shares and see limited upside from current levels," he wrote in a note to investors. He said the company posted positive revenue for the first time in seven quarters, but much of the improvement was driven by lower write-downs on advisory fees and other interests rather than new business. Shares fell 11 cents, or 5 percent, to $2.14 in morning trading. The stock has ranged from 58 cents to $5.14 over the past year.