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Chimera Investment Corporation Message Board

  • able39 able39 Mar 12, 2010 8:53 PM Flag

    cim released their Income statement

    today. I just bought into cim today so I decided to look it over some more. I noticed that gross profit, operating income, were both up approximately 2.2x and 2.6x the previous quarter[3]. At the same time 'earnings before interest and taxes' and 'income before tax' and 'net income applicable to common shares' went down approx. 40%. This looks bad to me. Am I missing something. If I'm right, I made a mistake buying cim today. Someone please give me your read on this. Thanks for your response. able

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    • CIM is ok. The earning reflects a snapshot close on Dec. 31st, and underestimates its 3-d shot. It would be helpful to view the comments of the CIM president. Ex dividend should be announced in less than ten days. NLY hold 8000000 share of CIM..You are OK. If hedge cause a drop to manipulate CIM, I plan to hold long term until the next dividend. Libor rates seem stable, slightly up .0026 from its recent long term level. My opinion. It any recent drop occurs, buy more.

    • jrad52---thanks, that helps. able39

    • I think your first problem might be that you're reading Yahoo's Key Stats page and not CIM's earnings release.

      CIM released earnings over a month ago and issued its 10-K in Feb, so nothing got issued today. CIM does not show any line called gross profit or operating income. Yahoo takes CIM's number and sort of squeezes tham into a "one size fits all" Key Stats page, but financial companies do not generally use those classifications. Anyway, if your real question is why earnings were down 40% in Q4 vs Q3, the answer is simple. In Q3, CIM had $ 75 million of realized gains from sales of investments. In Q4, realized gains were only $ 16 million. This caused about 95% of the drop in EPS.

      I wouldn't worry about quarterly changes in realized gains; they are matters of timing only. The bigger issue is that in Q3, realized plus unrealzed gains were $ 240 million while in Q4, realized plus unrealized gains were a loss (bad grammar, sorry, it's early) of $ 30 million, for a swing of $ 270 million. The unrealized items hit equity directly and don't go to the P&L. Again, you shouldn't look at this as being meaningful on a quarterly basis, because you can't annualize the price change. It's a component of book value that you should consider.

      Hope this helps.

    • Keep digging. SEC reports easy to get. That does not sound

      good.

 
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