Genworth Financial shares rally on earnings report
Genworth Financial posts better-than-expected 1st-quarter earnings, shares close to year high
NEW YORK (AP) -- Genworth Financial jumped in midday trading Wednesday, a day after the insurance company posted better-than-expected quarterly results.
The Richmond, Va., reported it earned $103 million, or 21 cents per share, in the first three months of the year, more than double year-ago net income of $46 million, or 9 cents per share.
Net operating income — which excludes investment gains and losses and other items — surged to $151 million, or 30 cents per share, from $17 million, or 3 cents per share, in the 2012 quarter.
Revenue was virtually flat at $2.3 billion, as higher premiums were offset by a dip in investment income.
On average, analysts surveyed by FactSet expected quarterly operating earnings of 28 cents per share and revenue of $2.53 billion.
Genworth's U.S. life insurance division posted net operating income of $85 million, up from $64 million a year ago. The company credited "favorable mortality," or fewer people dying.
Global mortgage insurance operations swung to a quarterly operating profit of $102 million, reversing last year's loss of $37 million.
Raymond James analyst Steven D. Schwartz noted that long-term care also did better than he expected, with earnings of $14 million versus his estimate of $6 million. The business benefited from favorable claims termination rates, he wrote in a note. He rates the stock "Market Perform."
The company also said it will stop selling AARP-branded long-term care insurance products on June 1. The change won't affect existing coverage.
Shares of Genworth Financial Inc. rose 5.6 percent, or 56 cents, to $10.59 while the broader markets were down. The stock is up 41 percent in the year to date and is close to a 52-week-high of $10.74.
