Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Assured Guaranty Ltd. (AGO - Snapshot Report) delivered operating net income of 52 cents per share in the second quarter of 2013, lagging the Zacks Consensus Estimate of 59 cents. Earnings were 15% lower from 61 cents in the prior-year quarter.

The decline was largely attributable to lower net earned premiums. However, share buybacks limited the downside by 2 cents.
 
Including realized gains on investments of $2 million, non-credit impairment unrealized fair value gains on credit derivatives of $28 million, fair value losses on committed capital securities of $2 million, foreign exchange losses on re-measurement of premiums receivable and loss and loss adjustment expense reserves of $3 million and effect of consolidating financial guaranty variable interest entities of $96 million; net income of Assured Guaranty came in at $1.16 per share, down 42% year over year.

Behind the Headlines

Assured Guaranty generated total revenue of $309 million, down 15.8% year over year. Total revenue surpassed the Zacks Consensus Estimate of $291 million.

Net earned premiums were $178 million, down 24.2% year over year, attributable to the scheduled amortization of the insurance portfolio and lower premium accelerations.

Net investment income of Assured Guaranty declined 3.1% year over year to $94 million in the second quarter.

Credit derivative revenues improved 17.6% year over year to $40 million, largely driven by higher negotiated terminations, but partially offset by lower scheduled revenues.

Total expenses of Assured Guaranty were $170 million, down 17.1% year over year attributable to lower financial guaranty insurance expense and lower interest expense.

Loss expense decreased 17.5% year over year to $80 million, largely attributable to decline in U.S. residential mortgage-backed securities (RMBS) and other structured finance losses. However, higher public finance losses were a partial offset.

Total economic loss development was $79 million in the reported quarter, largely attributable to increase in U.S. public finance losses mainly due to exposure to Detroit pension obligation and general obligation bonds, along with higher U.S. RMBS losses. However, increase in projected representations and warranties (R&W) recoveries due to a settlement agreement, and the increase in risk free rates used for discounting was a partial offset.

Financial Details

Assured Guaranty exited the quarter with $143 million in cash, improving from $138 million at 2012 end.

Long term borrowings of Assured Guaranty decreased to $827 million at quarter end from $836 million at 2012 end.

Book value as of Jun 30, 2012 was $49.06, up 4% from $47.17 as of Dec 31, 2012.

Share Repurchase Update

Assured Guaranty spent $244 million to buy back 11.5 million shares during Mar 5, 2013 to Jun 30, 2013.

Performance of Other Multi-Line Insurers

Cigna Corp’s. (CI - Analyst Report) second-quarter 2013 net operating earnings of $1.78 per share outpaced the Zacks Consensus Estimate of $1.59 per share. Moreover, results surged nearly 19% year over year.

American International Group Inc. (AIG - Analyst Report) reported second-quarter 2013 operating earnings per share of $1.12, significantly beating the Zacks Consensus Estimate of 85 cents and the year-ago quarter figure of 96 cents per share.

FBL Financial Group Inc. (FFG - Snapshot Report) reported earnings of 98 cents per share in the second quarter of 2013. The results beat the Zacks Consensus of Estimate of 81 cents and was ahead of the year-ago figure of 72 cents.

Zacks Rank

Assured Guaranty carries a Zacks Rank #3 (Hold).
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
VERTEX ENERG VTNR 8.25 +10.59%
MODINE MANUF MOD 17.12 +8.77%
CLAYTON WILL CWEI 140.03 +7.27%
E*TRADE FINA ETFC 22.67 +5.44%
KNIGHTSBRIDG VLCCF 13.22 +5.42%