NEW YORK -(Dow Jones)- SLM Inc. ( SLM ) Chief Executive Albert Lord mixed continued pleas for investor patience with notes of optimism about the student loan company’s prospects Tuesday, saying the company is seeing signs of improvement in its private loan business and has “resolved” issues related to looming debt maturities.
Forecasting 2010 per-share earnings “well in excess” of $1.80–three cents ahead of Wall Street expectations–Lord said the company, commonly known as Sallie Mae, is focused on slimming itself to better address a dramatically smaller student loan marketplace. Lord, who is also vice chairman, reiterated 2011 earnings guidance of $1.50 per share, compared with analysts’ expectations of $1.54.
“We are undergoing profound change,” Lord said at the FBR Capital Markets Fall Investor Conference. “We’re not a different company, we’re just a smaller company.”
Lord’s comments come after the U.S. government took over originations of federally guaranteed loans in July, cutting Sallie Mae and its peers out of the process and limiting their lending opportunities. The companies had earned significant fees from those federal loan originations.
As a result of the new model, Sallie Mae has been slashing costs and looking for new revenue streams. Saying that “priority number one” is to resize the company, Lord reiterated Sallie Mae’s October forecast of hitting a run rate below $1 billion by the end of 2011. The company is cutting its workforce by 20%.
Shares of Sallie Mae were recently trading up 0.3% to $11.42
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