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MGIC Investment (MTG) Beats on Q2 Earnings & Revenues
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MGIC Investment Corp. (MTG - Free Report) reported second-quarter 2016 adjusted net income per share of 26 cents, which outperformed the Zacks Consensus Estimate of 20 cents by 30%. However, the bottom-line decreased 7.14% year over year.
MGIC Investment’s total operating revenue of $262.7 million was up 8.2% year over year on higher premiums earned, investment income and other income. Also, the top line surpassed the Zacks Consensus Estimate by 3.2%.
New insurance written was $12.6 billion in the reported quarter, up 6.8% from $11.8 billion in second-quarter 2015.
As of Jun 30, 2016, the company’s primary insurance in force was $177.5 billion, up 5.2% year on year. It covered approximately one million mortgages.
Persistency, or the percentage of insurance remaining in force from the year before, was 79.6% as of Jun 30, 2016 compared with 80.4% as of Jun 30, 2015.
Percentage of delinquent loans including bulk loans was 5.3% as of Jun 30, 2016 compared with 6.8% as of Jun 30, 2015.
Primary delinquent inventory plunged 20.8% year over year to $52.6 billion.
Net underwriting and other expenses totaled $37.6 million, down 0.8% year over year.
Losses incurred in the quarter narrowed 48.3% to $46.6 million. A $55 million reduction in losses in the second quarter was due to positive development on the company’s primary loss reserve. The company had recorded positive development of around $22 million in the second quarter of 2015.
Total losses and expenses decreased 23.3% year over year to $98.3 million. Also, underwriting and other expenses, net was down 0.7% year over year, while interest expenses decreased 29.5% year over year. All these factors contributed to the fall in total losses and expenses.
Financial Update
Book value per share, a measure of net worth, soared about 102% year over year to $7.37 as of Jun 30, 2016 from $3.65 as of Jun 30, 2015.
As of Jun 30, 2016, MGIC Investment had approximately $4.9 billion in cash and investments, up 0.5% year over year.
In the second quarter, the company repurchased $50.2 million 5% convertible senior notes, due 2017, for $52.1 million plus accrued interest.
Dividend Update
During the second quarter, in April and June, MGIC Investment paid $16 million in dividends to the holding company.
We wait to see how the stock fares following the second-quarter outperformance.
Currently MGIC Investment carries a Zacks Rank #4 (Sell). Among the other players from the insurance industry that have reported their second-quarter earnings so far, the bottom line at RLI Corp. (RLI - Free Report) and Progressive Corp. (PGR - Free Report) missed their respective Zacks Consensus Estimates, while Brown & Brown Inc.’s (BRO - Free Report) earnings beat the same.
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MGIC Investment (MTG) Beats on Q2 Earnings & Revenues
MGIC Investment Corp. (MTG - Free Report) reported second-quarter 2016 adjusted net income per share of 26 cents, which outperformed the Zacks Consensus Estimate of 20 cents by 30%. However, the bottom-line decreased 7.14% year over year.
Operational Update
MGIC Investment’s total operating revenue of $262.7 million was up 8.2% year over year on higher premiums earned, investment income and other income. Also, the top line surpassed the Zacks Consensus Estimate by 3.2%.
New insurance written was $12.6 billion in the reported quarter, up 6.8% from $11.8 billion in second-quarter 2015.
As of Jun 30, 2016, the company’s primary insurance in force was $177.5 billion, up 5.2% year on year. It covered approximately one million mortgages.
Persistency, or the percentage of insurance remaining in force from the year before, was 79.6% as of Jun 30, 2016 compared with 80.4% as of Jun 30, 2015.
Percentage of delinquent loans including bulk loans was 5.3% as of Jun 30, 2016 compared with 6.8% as of Jun 30, 2015.
Primary delinquent inventory plunged 20.8% year over year to $52.6 billion.
Net underwriting and other expenses totaled $37.6 million, down 0.8% year over year.
Losses incurred in the quarter narrowed 48.3% to $46.6 million. A $55 million reduction in losses in the second quarter was due to positive development on the company’s primary loss reserve. The company had recorded positive development of around $22 million in the second quarter of 2015.
Total losses and expenses decreased 23.3% year over year to $98.3 million. Also, underwriting and other expenses, net was down 0.7% year over year, while interest expenses decreased 29.5% year over year. All these factors contributed to the fall in total losses and expenses.
Financial Update
Book value per share, a measure of net worth, soared about 102% year over year to $7.37 as of Jun 30, 2016 from $3.65 as of Jun 30, 2015.
As of Jun 30, 2016, MGIC Investment had approximately $4.9 billion in cash and investments, up 0.5% year over year.
In the second quarter, the company repurchased $50.2 million 5% convertible senior notes, due 2017, for $52.1 million plus accrued interest.
Dividend Update
During the second quarter, in April and June, MGIC Investment paid $16 million in dividends to the holding company.
We wait to see how the stock fares following the second-quarter outperformance.
MGIC INVSTMT CP Price, Consensus and EPS Surprise
MGIC INVSTMT CP Price, Consensus and EPS Surprise | MGIC INVSTMT CP Quote
Zacks Rank and Performance of Other Stocks
Currently MGIC Investment carries a Zacks Rank #4 (Sell). Among the other players from the insurance industry that have reported their second-quarter earnings so far, the bottom line at RLI Corp. (RLI - Free Report) and Progressive Corp. (PGR - Free Report) missed their respective Zacks Consensus Estimates, while Brown & Brown Inc.’s (BRO - Free Report) earnings beat the same.
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 >>