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Margins Muss NelNet

Shares fall 4% as the student lender posts a mixed quarter.

Updated from 7 a.m.


(NNI) - Get Nelnet, Inc. Class A Report

slipped 4% Friday after saying third-quarter margins were squeezed.

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The Lincoln, Neb., student lender lost $22 million, or 42 cents a share, for the quarter ended Sept. 30, reversing the year-ago profit of $72 million, or $1.34 a share. The latest quarter was hit by an $80 million unrealized loss related to derivative market value, foreign currency, and put option adjustments.

Excluding those losses, so-called adjusted base net income rose to 52 cents in the latest quarter from 39 cents a year ago. Base net income was 62 cents a share, beating the 54-cent Thomson Financial target.

"We had a good quarter with solid growth. We were especially pleased with our strong fee income growth, continued diversification of revenue, and the outstanding performance of our asset generation channels," said CEO Mike Dunlap. "Although we were affected by margin compression in the quarter, we believe the results demonstrate that our strategy to grow our business while diversifying our revenue stream is working very well."

Shares fell $1.17 to $29.03.