With first-quarter 2014 operating net earnings of 39 cents per
Genworth Financial Inc.
) delivered yet another quarter of positive earnings surprise.
Earnings surpassed the Zacks Consensus Estimate by 8.3% and the
year-ago number by 28%.
Net income shot up 79% year over year to 37 cents per share.
Genworth witnessed solid performance at its mortgage insurance
businesses benefitting from an improved loss ratio. Long-term
care premiums also continue to increase, which in turn favorably
impacted earnings in the U.S. Life Insurance Division.
Following a solid performance, shares of Genworth gained 0.58% in
the after-market session.
Genworth's total revenue slipped 0.8% year over year to $2.32
billion. The decline was primarily due to lower net investment
income (down 1.1%) and lower insurance, investment product fees,
and other (down 21.4%). The top line also missed the Zacks
Consensus Estimate by 4.2%.
Total benefits and expenses decreased 2.4% year over year to $2.0
Quarterly Review Segment-wise
U.S. Life Insurance
: Net operating income improved 10.6% year over year to $94
million. Favorable results across long-term care insurance and
fixed annuity product lines aided the improvement.
Global Mortgage Insurance
: The segment's net operating income of $132 million in the
quarter increased 29% year over year. Better results at U.S.
Mortgage Insurance and at International Mortgage Insurance aided
Corporate and Run-Off
: Net operating loss was $32 million in the reported quarter,
narrower than $36 million loss incurred in the year-ago quarter.
Genworth exited first quarter with cash, cash equivalents and
invested assets of $75.5 billion, up 2.8% year over year.
Genworth's long-term borrowings stood at $5.15 billion as of
March 31, 2014, slightly down from $5.16 million at 2013-end.
Genworth Mortgage Insurance Australia Limited has filed
prospectus with the Australian Securities and Investments
Commission for an initial public offering (IPO) of 40% of its
Upon culmination, gross proceeds from the IPO are estimated
between $400 and $700 million while fees and expenses in
connection with the offering are projected between $23 million
and $32 million.
Proceeds from the IPO are expected to be deployed to pay down
some of the intercompany funding arrangements with subsidiaries.
The remaining will be allotted to Genworth.
The company intends to complete the IPO during the first half of
Performance of Other Life Insurers
StanCorp Financial Group Inc
) first-quarter 2014 operating net earnings of $1.14 per share
missed the Zacks Consensus Estimate by 7.3%. Earnings however
improved 6.5% year over year.
Reinsurance Group of America Inc
) reported first-quarter operating income of $1.61 per share,
significantly below the Zacks Consensus Estimate of $1.97.
Results were also down 2.4% year over year.
) reported first-quarter net operating income of $1.52 per share,
beating the Zacks Consensus Estimate by a couple of pennies.
Earnings were also up 9.4% year over year.
Genworth presently carries a Zacks Rank #3 (Hold).
GENWORTH FINL (GNW): Free Stock Analysis
REINSURANCE GRP (RGA): Free Stock Analysis
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