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Assured Guaranty Q3 Earnings Outshine on Revenue Growth

Assured Guaranty Ltd . AGO delivered operating net income of $1.12 per share in the third quarter of 2015 that breezed past the Zacks Consensus Estimate of 66 cents. Earnings improved 6.7% year over year. Top-line growth with lower share count drove the improvement.

Assured Guaranty, Ltd (AGO) - Earnings Surprise | FindTheCompany

Including one-time items, net income of Assured Guaranty came in at 88 cents per share, up 59% year over year.

Operational Update

Assured Guaranty generated total revenue of $369 million, up 35% year over year largely on a 47% increase in net earned premiums and 12% higher net investment income.

Premiums improved on higher accelerations and the acquisition of Radian Asset Assurance Inc.

However, total expenses of Assured Guaranty increased more than five-fold to $152 million in the quarter largely due to wider loss and loss adjustment expenses.

Financial Details

Assured Guaranty exited the quarter with $66 million in cash, down 12% from the 2014-end level.

Total shareholders' equity at the end of the quarter was $5.82 billion, up 1% from $5.76 billion at year-end 2014.

Long-term borrowings by Assured Guaranty remained almost unchanged from the 2014-end level of $1.30 billion as of Sep 30, 2015.

Book value was recorded at $59.97 per share as of Sep 30, 2015, up 11.7% from the end of 2014.

Share Repurchase and Dividend Update

On Nov 4, 2015, the board of directors of Assured Guaranty approved a quarterly dividend of 12 cents per share. The dividend will be paid on Dec 2, to shareholders of record on Nov 18.

In the quarter under review, Assured Guaranty spent $135 million on buying back 5.4 million shares. Subsequent to the third quarter, through Nov 5, the company spent another $48 million on repurchasing 1.7 million shares. With these, Assured Guaranty has shares worth $143 million remaining under its authorization.

Business Update

Assured Guaranty has completed its direct pursuit of representations and warranties (R&W) claims in its insured residential mortgage-backed securities portfolio by inking a deal with certain providers of R&W in early October.

Zacks Rank

Assured Guaranty carries a Zacks Rank #2 (Buy).

Performance by Other Multi-Line Insurers

The bottom line at Assurant, Inc. AIZ and CNO Financial Group, Inc. CNO outperformed their respective Zacks Consensus Estimate while The Hartford Financial Services Group, Inc. HIG missed the same in the third quarter.

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ASSURANT INC (AIZ): Free Stock Analysis Report

HARTFORD FIN SV (HIG): Free Stock Analysis Report

CNO FINL GRP (CNO): Free Stock Analysis Report

ASSURED GUARNTY (AGO): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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