Ok, it is good news for Ambac that the monoline insurer of bonds posted a profit late yesterday of $558 million versus a $2.3 billion loss in the year ago quarter. But the fact remains that when you peel away some of the items behind the earnings, the company still didn’t perform all that well.
For starters, it had a $133.2 million gain related to the change in value of its credit derivatives portfolio. Add to that a $472 million tax benefit. Those numbers alone add up to $605 million of gains.
It continues to see stress in its portfolio of residential mortgage backed securities. The company recorded a net loss of $385.4 million.
The worst may be over for companies like Ambac. But that doesn’t mean they are finished feeling the pain of the credit crisis.