NEW YORK (AP) -- Shares of Chimera Investment Corp. dropped Thursday as a Credit Suisse analyst downgraded the company's rating following its decision to pay a lower-than-expected dividend.
THE SPARK: Chimera, which invests in residential and commercial mortgages and securities, announced Tuesday the second-quarter dividend of 9 cents a share, down from 11 cents in the previous quarter. New York-based Chimera also announced an estimated economic book value for the company of $2.76 a share as of March 31.
Credit Suisse analyst Douglas Harter said he had expected an estimate from the company of $2.89.
He also noted that Chimera didn't provide any update on when it expects to issue a restatement of its accounting. The company has delayed filing its financial results for 2011 and the first quarter of this year because it said it needed more time to review data. Chimera has said the changes won't affect the economic book values, cash flow, dividends or taxable income that it previously reported.
THE ANALYSIS: The Credit Suisse analyst wrote in a research note that while he doesn't expect any changes in Chimera's income to result from the restatement, "We have no visibility into future earnings" because of the ongoing review. That prompted Harter to downgrade Chimera to "Neutral" from "Outperform" and to lower the price target for the stock to $2.75 from $3.25.
SHARE ACTION: Chimera shares slid 16 cents, or 6 percent, to $2.58 in afternoon trading, close to their low for the day of $2.51. The shares have traded between $2.38 and $3.62 in the past 52 weeks.