Washington Mutual Profits Up on Sale of Asset Management Unit

Washington Mutual, the largest U.S. savings and loan, said fourth-quarter profit rose 22%, as a one-time gain from the sale of business offset a loss in its mortgage unit and charges to help the company prepare for a housing slowdown.

Net income for the Seattle-based thrift rose to $1.06 billion, or $1.10 per share, from $865 million, or 85 cents, a year earlier.

Results included a $415 million aftertax gain in the quarter from the sale of its WM Advisors Inc. asset management unit to Principal Financial Group Inc.

The thrift also recorded charges of $100 million for cost-saving initiatives, and other charges for the sale of mortgage servicing rights.

Analysts had expected Washington Mutual to earn 88 cents in the fourth-quarter, according to an estimate compiled by Thomson Financial.

Washington Mutual Chief Executive Kerry Killinger said strength in retail banking, card services and commercial banking helped offset a "difficult interest rate and operating environment, which particularly impacted the results in our home loans business."

The nation's third-largest mortgage lender posted a $122 million quarterly loss from mortgage lending. That unit lost $48 million for the year, compared with a profit of $1.03 billion
in 2005.

The company will also host a conference call, over the phone and through its website, at 5 pm New York time.