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First Marblehead Profit Falls

But the numbers beat Wall Street's estimates.
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First Marblehead


posted solid fourth-quarter numbers Thursday.

For the quarter ended June 30, the Boston-based provider of outsourcing services for private, nongovernmental education lending earned $43 million, or 65 cents a share, down from the year-ago $45 million, or 68 cents a share. Revenue rose to $120 million from $101 million a year earlier.

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Latest-quarter earnings beat the First Call analyst consensus estimate of 60 cents. First Marblehead attributed the earnings decline to a shift toward securitizing loans in three quarters rather than two as in previous years. The company expects to continue this pattern of three private label securitizations in fiscal 2006.

Private label loan facilitation volume rose 33% from a year ago to $434 million, while so-called Gate loan facilitations fell 13% to $5 million.

"Looking forward to fiscal 2006, the fundamental drivers of our industry indicate continued growth across the sector," CEO Daniel Meyers said. "Tuitions continue to increase at extra-normal rates, and the market is demanding specialized, well-structured loan products to help students and their families meet these increased costs. With our strong client relationships, diverse product offerings, securitization expertise, and enhanced processing capabilities, we expect to continue to increase our market share within this high-growth industry."

Late Thursday, First Marblehead shares rose 98 cents to $34.