Genworth Financial Inc .'s ( GNW ) second-quarter net operating earnings of 31 cents per share missed the Zacks Consensus Estimate by 11.4%. Earnings nonetheless increased 14.8% year over year driven by improvement in top line and reduction in expenses.
Genworth Financial, Inc - Earnings Surprise | FindTheBest
Net income shot up 25% year over year to 35 cents per share.
Genworth continues to witness strong performance in its mortgage insurance businesses, which benefitted from continued solid loss performance. However, adverse claims development affected the long-term care insurance business.
Genworth's total revenue increased 1.9% year over year to $2.4 billion. The improvement was prompted by higher premiums (up 4.4%). The top line outperformed the Zacks Consensus Estimate by 2.1%.
Total benefits and expenses decreased 1% year over year to $2.1 billion due to lower benefits and other changes in policy reserves and as well as acquisition and operating expenses.
Segment-wise Quarterly Review
U.S. Life Insurance : Net operating income declined 12.7% year over year to $69 million. Unfavorable results in long-term care insurance more than offset the improvement in life insurance.
Global Mortgage Insurance : The segment's net operating income of $136 million increased 33.3% year over year. Better results at U.S. Mortgage Insurance and at International Mortgage Insurance aided the upside.
Corporate and Run-Off : Net operating loss was $47 million, narrower than $48 million loss incurred in the year-ago quarter.
Genworth exited the second quarter with cash, cash equivalents and invested assets of $77.5 billion, up 5.5% from 2013 end.
Genworth's long-term borrowings totaled $4.7 billion as of Jun 30, 2014, down 9.1% from $5.2 million at 2013-end.
On May 21, 2014, Genworth Mortgage Insurance Australia Limited completed the minority initial public offering of 33.8% for $514 million in net proceeds.
Performance of Other Life Insurers
While earnings at Reinsurance Group of America Inc. ( RGA ) surpassed the respective Zacks Consensus Estimate, StanCorp Financial Group Inc. ( SFG ) and Torchmark Corp. ( TMK ) missed the same in the second quarter.
Genworth presently carries a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free reportGENWORTH FINL (GNW): Free Stock Analysis ReportSTANCORP FNL CP (SFG): Free Stock Analysis ReportTORCHMARK CORP (TMK): Free Stock Analysis ReportREINSURANCE GRP (RGA): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research