surged as much as 10% after the mortgage lender named a new CEO, brought back its dividend and said it would be profitable in the fourth quarter.
Former chief operating officer Larry Goldstone will take the CEO reigns of the company, replacing Garrett Thornburg, the company's founder, who will continue as chairman. The struggling jumbo residential mortgage lender announced the move in conjunction with reinstating its 25-cent dividend for common shares and declared fourth-quarter dividends for its Series C, D and E Preferred stocks.
Thornburg suspended its dividend in mid-October after the Santa Fe, N.M.-based firm posted a third-quarter loss of $1.08 billion amid turmoil in the mortgage industry and seize-up in the secondary markets for mortgage-backed securities. The reinstated dividend will be payable to shareholders on Jan. 30.
Thornburg said Tuesday that while it expects the company's profitability and market conditions to improve in 2008, the current mortgage market remains "uncertain." The company, however, believes "reinstating the common dividend for the fourth quarter would allow Thornburg Mortgage to meet the investment interests of its shareholders and is consistent with the company's constructive outlook for 2008," it said in a statement.
Goldstone, in an interview on
Tuesday, said that Thornburg would be profitable in the fourth quarter.
Analysts expect the company to earn 29 cents a share in the current quarter.
Goldstone, who retained his title of president, said in the release that while "there is still uncertainty in the global mortgage and credit markets, Thornburg Mortgage remains cautious in its near-term outlook for financing high quality mortgage assets.
"As a result we are continuing to preserve our financial flexibility while maintaining our focus on originating or acquiring high quality mortgage assets," he said. "Longer-term we believe that our relatively stable credit position will help us improve our operating results in 2008 as mortgage finance markets stabilize.
Shares of Thornburg, which surged as high as $10.60 in early trading, recently were up 49 cents, or 5.1%, to $10.10.