AMBAC again demonstrated why its AAA rating is a farce after losing more than a billion and a half in the first quarter of 2008. From marketwatch.com
Ambac reports quarterly net loss of $1.66 billion
Ambac Financial reported a first-quarter net loss of $1.66 billion on Wednesday as the bond insurer continued to struggle with the effects of the mortgage meltdown and broader credit crunch.
The net loss was $11.69 a share, versus net income of $2.02 a year earlier, the company said. Its operating loss in the latest quarter was $6.93 a share. Ambac (ABK) was expected to report a loss of $1.51 a share, according to the average estimate of seven analysts polled by Thomson Reuters. However, the range of forecasts varied widely, from a profit of 71 cents a share to a loss of $5.34 a share.
....The firm said its latest results include pretax mark-to-market losses on credit derivatives exposure of $1.73 billion and a loss provision of $1.04 billion on direct exposure to mortgage-related securities. There was also $292.2 million of other losses from direct and indirect exposure to residential mortgages....
...."While we realize that these are disappointing credit results, we continue to believe that the capital raised and strategic business actions taken during the quarter will enable us to get beyond this credit market," said Michael Callen, chairman and interim CEO, in a statement Wednesday.
A loss of $11.69 per share versus average expectations of $1.51. Even the most pessimistic forecast was light by more than 100% at $5.34 per share. It will be interesting to see the spin that the rating agency spin doctors apply this time around to justify keeping their worthless AAA ratings in tact.