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Genworth Financial (GNW) Q3 Earnings: A Surprise in Store?
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Genworth Financial, Inc. (GNW - Free Report) is set to report third-quarter 2016 results on Nov 3, after the market closes. Last quarter, the company posted a positive earnings surprise of 19.05%. Let’s see how things are shaping up for this announcement.
Factors to be Considered this Quarter
Genworth Financial is likely to witness growth in its U.S. Mortgage Insurance business in the to-be-reported quarter. Improved new insurance written and increasing levels of new business written are expected to be the growth drivers.
Moreover, Life Insurance results have likley improved in the third quarter. Better results are expected at Long-Term Care insurance, owing to the benefits derived from premium rate action approvals and stable claims experience.
In addition, the company has likely experienced lower U.S. Life Insurance and headquarters expenses in the to-be-reported quarter.
However, Genworth is estimated to have increased LTC claim reserves by $400–450 million, which might lower third-quarter earnings by $260–300 million.
Also, a sustained low interest rate environment, have likely weighed on investment results.
With respect to surprise trend, the company delivered positive surprises in two of the last four quarters, but with an average miss of 38.85%.
Our proven model does not conclusively show that Genworth Financial is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Genworth Financial has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 21 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Genworth Financial carries a Zacks Rank #3.
Conversely, we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies from the finance sector that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:
Ares Management, L.P. (ARES - Free Report) has an Earnings ESP of +2.63% and a Zacks Rank #2. The company is set to report third-quarter earnings on Nov 7.
AerCap Holdings N.V. (AER - Free Report) has an Earnings ESP of +7.80% and a Zacks Rank #3. The company is slated to report third-quarter earnings on Nov 8.
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Genworth Financial (GNW) Q3 Earnings: A Surprise in Store?
Genworth Financial, Inc. (GNW - Free Report) is set to report third-quarter 2016 results on Nov 3, after the market closes. Last quarter, the company posted a positive earnings surprise of 19.05%. Let’s see how things are shaping up for this announcement.
Factors to be Considered this Quarter
Genworth Financial is likely to witness growth in its U.S. Mortgage Insurance business in the to-be-reported quarter. Improved new insurance written and increasing levels of new business written are expected to be the growth drivers.
Moreover, Life Insurance results have likley improved in the third quarter. Better results are expected at Long-Term Care insurance, owing to the benefits derived from premium rate action approvals and stable claims experience.
In addition, the company has likely experienced lower U.S. Life Insurance and headquarters expenses in the to-be-reported quarter.
However, Genworth is estimated to have increased LTC claim reserves by $400–450 million, which might lower third-quarter earnings by $260–300 million.
Also, a sustained low interest rate environment, have likely weighed on investment results.
With respect to surprise trend, the company delivered positive surprises in two of the last four quarters, but with an average miss of 38.85%.
GENWORTH FINL Price and EPS Surprise
GENWORTH FINL Price and EPS Surprise | GENWORTH FINL Quote
Earnings Whispers
Our proven model does not conclusively show that Genworth Financial is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Genworth Financial has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 21 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Genworth Financial carries a Zacks Rank #3.
Conversely, we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies from the finance sector that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:
Parkway, Inc. , which is expected to report third-quarter earnings on Nov 7, has an Earnings ESP of +28.89% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ares Management, L.P. (ARES - Free Report) has an Earnings ESP of +2.63% and a Zacks Rank #2. The company is set to report third-quarter earnings on Nov 7.
AerCap Holdings N.V. (AER - Free Report) has an Earnings ESP of +7.80% and a Zacks Rank #3. The company is slated to report third-quarter earnings on Nov 8.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>