Assured Guaranty Ltd.
) delivered operating net income of 73 cents per share in the
fourth-quarter of 2013, surpassing the Zacks Consensus Estimate
of 66 cents by 10.6%. However, earnings slid 23.2% from the
prior-year quarter number.
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The year-over-year decline was largely attributable to lower
revenues. However, lower U.S. residential mortgage-backed
securities (RMBS) loss expense limited the downside in the bottom
Including one-time items, net income of Assured Guaranty came in
at $1.90 per share, significantly higher than 38 cents reported
in the year-ago quarter. The surge was primarily due to
Non-credit impairment unrealized fair value gains on credit
derivatives compared with losses incurred in the prior-year
Assured Guaranty generated total revenue of $321 million in the
fourth quarter, down 28.2% year over year due to significantly
lower net earned premiums. The result, nevertheless, surpassed
the Zacks Consensus Estimate of $276 million by 16.3%.
Net earned premiums of Assured Guaranty were $194 million, down
39.6% year over year, attributable to the lower scheduled
amortization of the insurance portfolio, and lower refunds and
terminations of policies.
Net investment income of Assured Guaranty increased 8.1% year
over year to $107 million.
Assured Guaranty's credit derivative revenues also declined 9.7%
year over year to $28 million due to a decrease in structured
finance book of the business' net par outstanding.
Total expenses of Assured Guaranty fell by nearly 27.9% year over
year to $142 million. The decline was primarily due to lower loss
expense in the reported quarter.
Loss expense at Assured Guaranty plunged 47.2% year over year to
$67 million, largely attributable to decline in U.S. residential
mortgage-backed securities (RMBS) losses. However, higher U.S.
public finance losses were a partial offset.
2013 Full-Year highlights
Assured Guaranty reported 2013 net operating earnings of $3.25
per share, up 15.7% year over year. The number also exceeded the
Zacks Consensus Estimate of $3.18 by 2.2%. The improvement
resulted from lower loss expense from U.S. RMBS and also lower
losses incurred on Greek exposures.
Including one-time items, net income of the company was $4.30 per
share, surging from 57 cents reported in 2012.
Revenues totaled $1.32 billion, down 19% year over year due to
lower net earned premiums.
Assured Guaranty exited the quarter with $184 million in cash,
increasing from $106 million as of the end of third-quarter 2013.
Operating shareholders' equity as of 2013-end stood at $6.16
billion, up from $6.04 billon as of third-quarter end.
Long-term borrowings of Assured Guaranty were $816 million as of
Dec 31, 2013, against $819 million as of Dec 31, 2012.
Share Repurchase Update
In 2013, Assured Guaranty bought back 12.5 million of its shares
for $264 million under its $315 million share repurchase
authorization. As of the end of 2013, the company had a share
repurchase authorization of $400 million.
Assured Guaranty presently carries a Zacks Rank #3 (Hold). Some
top-ranked stocks worth mentioning in the multi line insurance
Old Republic International Corporation
). While AEGON and Old Republic both sport a Zacks Rank #1
(Strong Buy), Kemper carries a Zacks Rank #2 (Buy).