Executives for Lincoln-based student loan company Nelnet Inc. gave an optimistic financial report Tuesday, despite pending legislation that would change the federal student loan business, and investors boosted the company's price to its highest level since September 2008.
Nelnet's third-quarter net income was $46.4 million, or 93 cents per share, nearly double its year-ago third-quarter net income.
The company's board of directors reinstated the dividend, planning to pay 7 cents per share on Dec. 15 to those who own shares on Dec. 1. It had suspended the dividend in March, shortly after President Barack Obama asked Congress to eliminate federal subsidies to private student lenders and to have students borrow directly from the government instead.
By March 2, Nelnet's stock price plummeted to $4.25 a share, but the price has been gaining since then, and by the close of trading Tuesday the price was $15.57, down 0.07 for the day.
Nelnet President Jeffrey R. Noordhoek told analysts on a conference call that he was “extremely pleased” with the recent performance, including an increase in fees for services that should continue through next year and revenue from a loan servicing contract with the federal government.
Revenue from fee-based businesses totaled $74.6 million in the third quarter, 47 percent of total revenue.
Noordhoek said that although the House of Representatives passed a bill that would end the guaranteed student loan program, the Senate likely won't act until after it considers health care legislation.
The student loan industry has proposed an alternative that would accomplish the government's objectives while preserving the loan program and its related jobs, he said.
“We can't understand why anyone wouldn't vote for the alternative plan,” he said.
Noordhoek said Nelnet's “base” net income, which excludes some one-time factors, was $50.2 million, or $1.01 per share, in the three months that ended Sept. 30 compared to 47 cents a year earlier.
Through nine months, Nelnet's net income was $80.1 million, or $1.60 per share, compared with a loss of $2.3 million, or 5 cents a share, in the first nine months of 2008. Nine-month base net income was $113.5 million, or $2.30 per share, compared with $65.2 million, or $1.33 per share, in 2008.
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