Genworth Financial Inc.
) reported third-quarter 2013 net operating income of 24 cents
per share. The results fell short of the Zacks Consensus Estimate
by 4 cents but were a couple of cents above the year-ago level of
Adjusting for net investment losses of $13 million and income
from discontinued operations of $2 million, net income came in at
22 cents per share, skyrocketing from 7 cents per share earned in
the year-ago quarter.
Genworth witnessed robust performance at Global Mortgage
Insurance and long-term care insurance, benefitting from progress
on rate actions. The divesture of its wealth management business
positioned it well to focus on capital generation, increasing the
financial strength and flexibility of the company as well as
simplifying the business model. Moreover, a new credit line and
redemption of 2015 notes along with increase in cash balance
enhanced Genworth's financial position. Following a robust
quarterly performance, shares of Genworth moved up 1.3% to close
at $14.57 yesterday.
Quarterly Operational Performance
Genworth's total revenue decreased 5.6% to $2.32 billion in the
quarter from $2.46 billion in the year-ago quarter. Top line
declined primarily due to lower net investment income, lower
premiums as well as lower insurance, investment product fees, and
other. It missed the Zacks Consensus Estimate of $2.41 billion.
Premium revenues at Genworth decreased 1.7% year over year to
$1.3 billion in the quarter.
Net investment income declined 2.9% year over year to $801
Total benefits and expenses declined 13% year over year to $2.07
Quarterly Review by Segment
U.S. Life Insurance
: Net operating income improved 29.1% year over year to $111
million. Favorable results from long-term care insurance and
fixed annuity product lines aided the improvement.
Global Mortgage Insurance
: The segment's net operating income of $87 million in the
quarter surged 53% year over year. A substantially lower loss at
U.S. Mortgage Insurance and higher income from International
Mortgage Insurance aided the improvement.
Corporate and Run-Off
: Net operating loss was $79 million in the reported quarter,
wider than $32 million loss incurred in the year-ago quarter.
Genworth exited the quarter with cash, cash equivalents and
invested assets of $73.6 billion, down from $78.7 billion at
Genworth's long-term borrowings stood at $4.78 billion at quarter
end, almost in line with 2012-end.
In August, Genworth Financial closed the divestiture of wealth
management business to AqGen Liberty Acquisition, Inc., for
$412.5 million. This included the sale of Genworth Financial
Wealth Management, and alternative solutions provider, the
Net proceeds of approximately $360 million together with
available cash will be deployed to redeem the company's remaining
Performance of other life insurers
StanCorp Financial Group Inc.
) reported third-quarter 2013 operating net earnings of $1.45 per
share, exceeding the Zacks Consensus Estimate by 39% and year-ago
earnings by 38%.
Genworth carries a Zacks Rank #3 (Hold). Life insurers
Lincoln National Corporation
Sun Life Financial Inc.
), with Zacks Rank #2 (Buy), will report their results on Oct 30
and Nov 7 respectively.
GENWORTH FINL (GNW): Free Stock Analysis
LINCOLN NATL-IN (LNC): Free Stock Analysis
STANCORP FNL CP (SFG): Free Stock Analysis
SUN LIFE FINL (SLF): Free Stock Analysis
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