First Marblehead Miss

Shares fall.
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First Marblehead (FMD) sank 7% late Thursday after the student loan processor missed third-quarter earnings targets.

For the quarter ended March 31, First Marblehead made $71 million, or 75 cents a share, up from the year-ago $59 million, or 62 cents a share. Revenue rose to $178 million from $149 million a year earlier.

The Boston-based company said earnings were reduced by 11 cents a share by a decision to change the assumptions it makes about the value of its service receivables.

Analysts surveyed by Thomson Financial were looking for an 84-cent profit on sales of $198 million.

"First Marblehead had a very strong third quarter and a terrific first nine months of fiscal 2007," said CEO Jack L. Kopnisky. "Our facilitated loan volume continues to grow, we continue to diversify our client base, and we remain dedicated to our mission of helping students finance their education dreams."

The news comes just a week after First Marblehead shares dropped sharply on worries that a pending buyout of student lender

Sallie Mae

(SLM) - Get Report

would lead to reduced dealings with customers

Bank of America

(BAC) - Get Report

and

JPMorgan

(JPM) - Get Report

.

Shares fell $2.68 to $34.99.