Ambac Financial Group posted second quarter earnings of $823.1 million, thanks in large part to mark-to-market gains on credit derivatives, the company announced this morning. Ambac Financial, the parent of bond insurer Ambac Assurance Corp., said it had mark-to-market gains of $961.6 million in the second quarter, helping it record a net income equivalent of $2.80 per diluted share. Net income in the second quarter last year was $173 million, or $1.67 per share.

Excluding these gains and others on the sale of investments, Ambac Financial posted an operating loss of $1.53 per share. Estimated impairment losses in its credit derivative portfolio totaled $1.06 billion in the second quarter, reflecting credit deterioration and internal downgrades on several transactions, the company said.

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