Assured Guaranty Gains as Low Share Count Lifts Q2 Earnings - Analyst Blog

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Assured Guaranty Ltd . ( AGO ) delivered operating net income of 56 cents per share in the second quarter of 2014, surpassing the Zacks Consensus Estimate by 50%. Earnings improved 7.7% from the prior-year quarter on lower share count.

Share price gained 3.3% to close at $22.70 on Friday.

Including one-time items, net income of Assured Guaranty came in at 89 cents per share, declining 23.2% year over year.


Operational Update

Assured Guaranty generated total revenue of $239 million, down 15.8% year over year due to significantly lower net earned premiums.

Net investment income of Assured Guaranty increased 3.2% year over year to $97 million.

Present Value of New Business Production (PVP) improved 69% year over year to $27 million. The company continued to benefit from a diversified strategy, which includes targeting U.S. public finance, international infrastructure and structured finance opportunities.

Total expenses of Assured Guaranty fell nearly 27% year over year to $124 million. The decline was primarily attributed to lower loss expense in the reported quarter.

Loss expense at Assured Guaranty fell 50% year over year to $41 million, largely attributable to improvements in U.S. RMBS expected losses.

Financial Details

Assured Guaranty exited the quarter with $106 million in cash, decreasing from $184 million as of 2013 end.

Operating shareholders' equity at quarter end stood at $6.15 billion, declining slightly from $6.16 billion as of 2013 end.

Long-term borrowings of Assured Guaranty were $1.3 billion as of Jun 30 against $0.8 billion as of 2013 end.

Share Repurchase Update

Assured Guaranty bought back 7.1 million of its shares for $177 million and another 5.7 million shares since Jun 30. The board of directors approved an additional $400 million share repurchase authorization. Total buyback authorization stands at $445 million.

Zacks Rank

Assured Guaranty presently carries a Zacks Rank #3 (Hold).

Performance of Other Multi Line Insurers

While Cigna Corp. ( CI ) and Assurant Inc. ( AIZ ) surpassed their respective Zacks Consensus Estimate, CNO Financial Group Inc. ( CNO ) missed the same in the second quarter.


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ASSURANT INC (AIZ): Free Stock Analysis Report

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ASSURED GUARNTY (AGO): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: AIZ , CI , CNO , AGO

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