Accounting Analysts Ponder Fannie Earnings Delay

Fannie Mae’s decision to delay its third-quarter earnings results has weakened the US mortgage finance company’s strident defence of its financial accounting practices, heightening concerns it may restate earnings, some analysts say.

“It raises more questions,” said Edwin Groshans, equity analyst at Fox-Pitt, Kelton. “If Fannie did nothing wrong, why can’t it file?”

Fannie typically reports third-quarter earnings by mid-October, but said last week that it would not release its results until it filed its quarterly report with the Securities and Exchange Commission. The company said it would “actively seek” to file by the SEC’s deadline on November 15, leaving open the possibility it may file later. Some analysts believe that Fannie is refraining from reporting earnings until it receives word from the SEC on whether its accounting practices comply with US accounting rules. The SEC is investigating Fannie’s accounting.

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