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Steep dividend cuts and losses in their company’s home- and consumer-lending divisions didn’t seem to faze CIT Group’s investors, who were happy to bid up the stock on hopes for a future focused on the firm’s commercial finance business.

“I would say that it was another messy quarter in what’s come to be a series of messy quarters,” Sameer Gokhale of Keefe, Bruyette & Woods told Forbes.com. Despite the noise from a dividend cut to 10 cents from 25 cents and greater-than-expected charges, its shares rose 6.1%, or 72 cents, to $12.50, on Thursday. Still, the company has lost 77.3% of its value over the past year as a result of the credit crunch emanating from the U.S. subprime crisis.

“Investors see management as doing the right things to get them back on track,” Gokhale said. “It’ll be slow and painful, but they’re moving in the right direction.”

Planned asset sales should provide it with enough liquidity for all of 2009–a big plus in a time when funding is hard to come by. As part of a capital-raising plan, CIT Group agreed to sell $4.6 billion of asset-based loan commitments and aircraft worth $770 million. It has also identified $2 billion in assets that it will either sell or use as collateral for a secured financing line.

“The company is saying they want to be smaller and more focused on its commercial finance business, and that appeals to a lot of investors,” Gokhale said. “The balance sheet will be smaller, but with greater predictability.”

CIT Group (nyse: CIT - news - people ) lost $257.2 million, or $1.35 per share, in the first quarter, compared with earnings of $200.6 million, or $1.01 per share, during the same period the previous year. Analysts polled by Thomson Financial, on average, had expected earnings of 58 cents per share for the quarter.

The New York-based financial services company’s home-lending division posted a loss of $153.3 million during the first quarter, while its consumer-finance division lost $95.2 million. The divisions earned a combined $11.9 million during the first quarter a year ago.

With deterioration in the credit markets continuing, especially among mortgage-related investments, CIT Group set aside $464.5 million to cover bad loans during the quarter. During the first quarter of 2007, CIT Group set aside just $71.1 million for loan-loss reserves. Among the first-quarter loss reserves, CIT Group set aside $217.8 million for losses in its home-lending division and $149.6 million for its consumer-lending division.

By Carl Gutierrez

The Associated Press contributed to this article