Nelnet saw its first-quarter earnings fall sharply compared with a year ago.
The Lincoln-based student finance company on Wednesday reported income of $41.6 million, or $1.03 per share, for the first quarter, compared with income of $113.9 million, or $2.78 per share, for the same period a year ago.
Nelnet said in a news release that its drop in earnings was due largely to changes in the fair values of derivative instruments that do not qualify for hedge accounting.
Excluding adjustments for derivative instruments left Nelnet with first-quarter income of $64.8 million, or $1.61 per share, compared with $68.3 million, or $1.67 a share, a year ago.
Those results, despite being lower than a year ago, were considerably higher than financial analysts' predictions.
Nelnet's overall revenue of $265 million for the quarter was down nearly 18% from a year ago.
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The company said it was servicing more than $472 billion worth of student loans for the federal government, as of March 31, up slightly from a year ago.
It also was notified that the federal government intends to extend its current servicing contract, which was set to expire June 15, by six months.
As has been the case since Nelnet bought it more than three years ago, Allo Communications continued to lose money despite adding customers and increasing revenue.
Nelnet said the number of Allo customers topped 40,000 in the first quarter, a 71% increase from a year ago. Allo also grew its revenue from $9.2 million in the first three months of 2018 to $14.5 million in the same period this year.
Despite that, Allo had a net loss of $4.8 million for the quarter, although that was smaller than the $7 million it lost in the first quarter of 2018.
Nelnet said it spend $12 million on capital improvements for Allo in the first quarter and anticipates spending $40 million in 2019.