Nelnet says third-quarter profit rises 71 percent

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Posted: Friday, November 8, 2013 12:00 am

Nelnet Inc., the Lincoln-based company that owns student loans and processes student-loan payments for others, said Friday that third-quarter profit rose 71 percent, on higher lending and fee income.

The company said net income was $62.8 million, or $1.35 a share, up from $36.8 million, or 78 cents a share, a year earlier. Income from interest earned on loans and investments rose 24 percent to $100 million.

Nelnet said it was notified by the Department of Education that the loan servicing contract expiring in June will be extended another five years. The company collects payments for the department on $107 billion of loans for 5.1 million borrowers, a contract worth $26 million in quarterly revenue.

Shares of Nelnet jumped on the contract extension Friday, rising $3.10, or 7.5 percent, to close at $44.25. The shares have almost doubled in the past year.

The company said third-quarter net income included adjustments for derivatives and foreign currency. Minus those, profit was $69 million, or $1.48 a share, up from $53.1 million, or $1.12 a share.

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