Genworth (GNW) Q3 Earnings Meet Estimates, Revenues Lag
Genworth Financial, Inc. GNW posted third-quarter 2019 adjusted operating earnings of 24 cents per share, in line with the Zacks Consensus Estimate. The bottom line declined 17.2% year over year.
Total revenues of Genworth Financial were $2 billion, up 1.3% year over year. The top line however missed the Zacks Consensus Estimate by 5.3%.
Net investment income grew 4.6% year over year to $816 million driven by higher limited partnership income, favorable prepayment speed adjustments on mortgage-backed securities, and growth in invested assets.
Total benefits and expenses increased 1.7% year over year to $1.8 billion, primarily owing to higher benefits and other changes in policy reserves, acquisition and operating expenses, net of deferrals, amortization of deferred acquisition costs and intangibles.
Genworth Financial, Inc. Price, Consensus and EPS Surprise
U.S. Mortgage Insurance: Adjusted operating income of $137 million was up 16% year over year. Loss ratio of 11% remained unchanged year over year.
Australia Mortgage Insurance: Adjusted operating income of $12 million was down 29.4% year over year. Loss ratio deteriorated 500 basis points, attributable to lower levels of earned premium from portfolio seasoning.
U.S. Life Insurance: Adjusted operating loss was $1 million, narrower than loss of $3 million incurred in the year-ago quarter due to higher losses at Life Insurance and lower income from Fixed Annuities.
Runoff: Adjusted operating income of $10 million was down 28.6% year over year.
Corporate and Other: Adjusted operating loss of $35 million was narrower than loss of $47 million incurred in the year-ago quarter.
Genworth Financial exited the quarter with cash, cash equivalents and invested assets of $1.6 billion, down 29% year over year.
Long-term borrowings of Genworth Financial totaled $3.7 billion as of Sep 30, 2019, almost unchanged year over year.
Book value per share (excluding accumulated other comprehensive income) was $21.38 as of Sep 30, 2019, down 0.2% year over year.
Genworth and Brookfield Business Partners entered into an agreement on Aug 13, 2019. Per the agreement, Brookfield Business Partners will purchase Genworth's majority interest in Genworth Canada for CAD$48.86 per share. The total transaction value is approximately CAD$2.4 billion. The deal will enable the completion of Genworth’s acquisition by Oceanwide (the Oceanwide Transaction). In connection with the agreement, Genworth and Oceanwide entered into the 12th Waiver and Agreement to extend the merger agreement deadline to not later than Dec 31, 2019.
Genworth Financial currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Insurance Releases
Of the insurance industry players that have reported third-quarter results so far, Global Life GL, Arthur J. Gallagher AJG and CNA Financial Corporation CNA beat the respective Zacks Consensus Estimate for earnings.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
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 report
Arthur J. Gallagher & Co. (AJG): Free Stock Analysis Report
Genworth Financial, Inc. (GNW): Free Stock Analysis Report
CNA Financial Corporation (CNA): Free Stock Analysis Report
Globe Life Inc. (GL): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.