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Genworth Financial Tops on Q4 Earnings, Rev - Analyst Blog

By: Zacks.com
Posted: 2/5/2014 2:20:00 PM
Referenced Stocks: GNW;RGA;SFG;TMK

Genworth Financial Inc. ( GNW ) reported fourth-quarter 2013 net operating income of 38 cents per share. The results were nearly 27% higher than the Zacks Consensus Estimate and 15% above the year-ago level.

Net income came in at 41 cents per share, up 21% year over year.

Genworth witnessed robust performance at U.S. Mortgage Insurance and U.S. Life Insurance. The long-term care insurance continues to benefit from progress on rate actions.

Following a robust performance, shares of Genworth gained 4.4% in the after-market session.

Full-Year Highlights

Genworth delivered operating net income of $1.24 per share in 2013 on revenues of $9.4 billion.

The bottom line exceeded the Zacks Consensus Estimate by 12% and the 2012 number by a whopping 51%. The top line however fell short of the 2012 equivalent by 2.5%.

The company reported net income of $1.12 per share, up 70% year over year.

Operational Performance

Genworth's total revenue decreased 2.2% year over year to $2.41 billion. The decline was primarily due to lower net investment income (down 0.6%), lower premiums (down 0.7%) as well as lower insurance, investment product fees, and other (down 17.7%). The top line, however, topped the Zacks Consensus Estimate of $2.39 billion.

Total benefits and expenses declined 1.7% year over year to $2.1 billion.

Quarterly Review by Segment

U.S. Life Insurance : Net operating income improved 63% year over year to $119 million. Favorable results across long-term care insurance, U.S. Insurance and fixed annuity product lines aided the improvement.

Global Mortgage Insurance : The segment's net operating income of $107 million in the quarter declined 19% year over year. Robust results at U.S. Mortgage Insurance (rebounding from a year-ago loss) was partially offset by soft results at International Mortgage Insurance.

Corporate and Run-Off : Net operating loss was $33 million in the reported quarter, narrower than $45 million loss incurred in the year-ago quarter.

Financial Update

Genworth exited 2013 with cash, cash equivalents and invested assets of $73.5 billion, down 6.6% year over year.

Genworth's long-term borrowings stood at $5.16 billion as of Dec 31, 2013, up 8.1% year over year due to notes issuance.

In Dec 2013, Genworth completed a $400 million senior notes offering. It made capital contributions of $300 million to Genworth Mortgage Holdings, LLC and $100 million to Genworth Mortgage Insurance Corporation (GMICO) . The contributions were made in anticipation of higher capital requirements due to be imposed by government-owned and government-sponsored enterprises (GSEs) as part of the anticipated revisions to their eligibility standards for qualifying as mortgage insurers.

Performance of Other Life Insurers

StanCorp Financial Group Inc. 's ( SFG ) fourth-quarter 2013 operating earnings of $1.49 per share exceeded the Zacks Consensus Estimate by 26.3%  and the year-ago number by 67%.

Reinsurance Group of America Inc . ( RGA ) reported fourth-quarter 2013 operating income of $2.17 per share, significantly exceeding the Zacks Consensus Estimate of $1.96. Results were, however, down 11.1% year over year.

Torchmark Corporation ( TMK ) reported fourth-quarter 2013 operating net income of $1.46 per share, in line with the Zacks Consensus Estimate. On a  positive note, the number increased 9.8% year over year.

Zacks Rank

Genworth presently carries a Zacks Rank #3 (Hold).



GENWORTH FINL (GNW): Free Stock Analysis Report

REINSURANCE GRP (RGA): Free Stock Analysis Report

STANCORP FNL CP (SFG): Free Stock Analysis Report

TORCHMARK CORP (TMK): Free Stock Analysis Report

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