Countrywide's ( CFC) second-quarter earnings shot up 83% from a year ago, as the mortgage company's strategy of offsetting declining loan volume with an ever-expanding interest-collection portfolio continued to insulate it from the decline in refinancing. Still, the bottom line was below analyst estimates, possibly reflecting a 173% jump in the provision for bad debt. The company also raised its quarterly dividend 33% to 20 cents. Calabasas, Calif.-based Countrywide earned $699.6 million, or $2.24 a share, in the three months to June 30, compared with earnings of $382.9 million, or $1.37 a share, last year. Overall revenue rose 43% to $2.33 billion. Analysts surveyed by Thomson First Call had been expecting earnings of $2.33 a share on revenue of $2.37 billion. Total loan production was $100 billion in the quarter, down 23% from a year ago, partially offset by a 40% year-over-year jump in loans Countrywide purchases outright from other lenders. Countrywide's servicing portfolio of loans on which it collects interest grew by $81 billion from Jan. 1 to $726 billion. Interest income rose 33% from a year ago to $1.07 billion in the latest quarter, while the gain on the sale of loans and securities fell 25% from a year ago to $1.28 billion. The provision for loan losses went to $19.7 million in the 2004 quarter from $7.2 million last year. Countrywide guided full-year earnings to $7.50 to $8.50 a share, compared with analyst estimates of $8.19 a share. On the Instinet premarket session, the stock fell $2.78, or 3.9%, to $72.28, leaving it about 8.5 times the high end of its 2004 guidance.