Yahoo Finance Sallie Mae 1Q net income slips 18 percent
Sallie Mae 1st-quarter net income falls on reduced gains as well as costs from Navient spinoff
NEW YORK (AP) -- Sallie Mae said Wednesday its net income sank 18 percent in the first quarter as some one-time gains came off the books and costs related to the spinoff of its Navient unit increased.
Sallie Mae said its operating expenses increased and it took $16 million in charges related to the separation of Navient, its loan management, servicing and asset recovery division. A year ago the company reported $84 million in gains from asset sales and debt repurchases.
Despite the decline in net income, Sallie Mae said delinquency on private education loans decreased to 3.4 percent, the lowest level since 2008.
Sallie Mae said its net income fell to $279 million, or 64 cents per share, from $341 million, or 74 cents per share. It said its core earnings — which exclude items such as impairment costs — totaled 51 cents per share.
Analysts expected net income of 55 cents per share, according to a survey by FactSet.
Sallie Mae said it would split in two in 2013, and it announced the Navient name in February. The company said its board approved the separation on Thursday.
The company, formerly known as SLM Corp., used to act as an intermediary and earned fees making student loans backed by the federal government in addition to making private student loans. But a 2010 law consolidated the federal loan program to save costs and cut private lenders out of the process.
The Newark, Del., company's shares rose 2.6 percent to $25.51 during the day and were unchanged in late trading.
