MGIC Investment Corporation
) reported fourth quarter 2012 operating loss of $1.91 per share,
substantially worse than the Zacks Consensus Estimate of a loss
of $1.69 per share. The company had reported an operating loss of
$0.67 per share in the prior-year quarter.
For the full year 2012, loss per share was $4.59 compared to a
loss per share of $2.42 for the full year 2011.
Total revenue for the quarter came in at $371.4 million, down
16.9% year over year. Net premiums written were reported at
$260.7 million down 1.2% year over year. The company's new
insurance written soared 67% year over year to $7.0 billion in
GIC's primary insurance in force stood at $162.1 billion as of
Dec 31, 2012, compared with $172.9 billion as of Dec 31,
Losses incurred were $688.6 million, up 43% year over
Net underwriting and other expenses were $51.5 million, up
1.6% year over year. Investment income plunged 46.0% year over
year to $21.7 million.
Persistency (the percentage of insurance remaining in force
from the previous year) was 79.8% as of Dec 31, 2012, compared
with 82.9% as of Dec 31, 2011.
Book value per share decreased to 97 cents per share as of Dec
31, 2012 compared with $5.95 as of Dec 31, 2011.
At Dec 31, 2012, MGIC's risk-to-capital ratio was 44.7 to 1,
exceeding the maximum allowed by many jurisdictions, and its
policyholder position was $640 million below the required minimum
of $1.2 billion.
The company has been reporting annual net loss for the past
consecutive 6 years. We do not expect the company to return to
profitability in 2013 given high unemployment rates, low cure
rates, low housing values, changes to the company's rescission
practices and unfavorable resolution of ongoing legal
MGIC retains a Zacks Rank #3(Hold)
Other companies in the same industry,
Radian Group Inc.
Genworth Financial Inc.
) are all witnessing losses from their mortgage
GENWORTH FINL (GNW): Free Stock Analysis
MBIA INC (MBI): Free Stock Analysis Report
MGIC INVSTMT CP (MTG): Free Stock Analysis
RADIAN GRP INC (RDN): Free Stock Analysis
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