We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Radian Group (RDN) Q2 Earnings Top Estimates, Revenues Rise
Read MoreHide Full Article
Radian Group Inc.’s (RDN - Free Report) second-quarter 2017 operating income of 48 cents per share beat the Zacks Consensus Estimate by 20%. However, the bottom line improved 26.3% year over year.
Radian Group Inc. Price, Consensus and EPS Surprise
Operating revenues grew 3% year over year to $260 million, courtesy of higher net premiums. However, lower investment income and service revenues suffered a decline.
New mortgage insurance written (NIW) grew 11% year over year to $14.3 billion in the quarter. As of Jun 30, 2017, total primary mortgage insurance in force was $191.6 billion, up 8% from $177.7 million as of Jun 30, 2016.
Persistency, which is the percentage of mortgage insurance in force that remains in the company’s books after a 12-month period, was 78.5% as of Jun 30, 2017. The company reported persistency of 79.9% as of Jun 30, 2016.
Primary delinquent loans decreased 20% year over year in the quarter.
Total expenses surged 92% year over year to $338 million, primarily due to impairment of goodwill and amortization of intangible assets in the quarter.
Segment Update
Net premiums earned by Mortgage Insurance segment were $229 million, up 3% year over year. Claims paid were $91.3 million in the quarter, up 1% year over year. Loss ratio improved 1420 basis points to 7.7%.
The Mortgage and Real Estate Services segment reported 5% year-over-year decline in total revenue to $40 million. Pre-tax operating income of $1.2 million was lower than an operating income of $1.5 million in the year-ago quarter.
Financial Update
Radian Group ended the quarter with a cash balance of $56.9 million, up 3% year over year.
Long-term debt was $989 million, down 23% year over year.
Book value per share, a measure of net worth, grew 3% year over year to $13.54 as of Jun 30, 2017.
Business Update
The company expects to restructure its business. Restructuring charges are likely to be within $25 million on a pre-tax basis.
Among other players from the insurance industry that have reported their second-quarter earnings so far, the bottom line of Brown & Brown, Inc. (BRO - Free Report) and Fidelity National Financial, Inc. (FNF - Free Report) have topped their respective Zacks Consensus Estimates, while The Progressive Corporation (PGR - Free Report) has missed the same.
More Stock News: Tech Opportunity Worth $386 Billion in 2017
From driverless cars to artificial intelligence, we've seen an unsurpassed growth of high-tech products in recent months. Yesterday's science-fiction is becoming today's reality. Despite all the innovation, there is a single component no tech company can survive without. Demand for this critical device will reach $387 billion this year alone, and it's likely to grow even faster in the future. Zacks has released a brand-new Special Report to help you take advantage of this exciting investment opportunity. Most importantly, it reveals 4 stocks with massive profit potential. See these stocks now>>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Radian Group (RDN) Q2 Earnings Top Estimates, Revenues Rise
Radian Group Inc.’s (RDN - Free Report) second-quarter 2017 operating income of 48 cents per share beat the Zacks Consensus Estimate by 20%. However, the bottom line improved 26.3% year over year.
Radian Group Inc. Price, Consensus and EPS Surprise
Radian Group Inc. Price, Consensus and EPS Surprise | Radian Group Inc. Quote
Behind the Headlines
Operating revenues grew 3% year over year to $260 million, courtesy of higher net premiums. However, lower investment income and service revenues suffered a decline.
New mortgage insurance written (NIW) grew 11% year over year to $14.3 billion in the quarter. As of Jun 30, 2017, total primary mortgage insurance in force was $191.6 billion, up 8% from $177.7 million as of Jun 30, 2016.
Persistency, which is the percentage of mortgage insurance in force that remains in the company’s books after a 12-month period, was 78.5% as of Jun 30, 2017. The company reported persistency of 79.9% as of Jun 30, 2016.
Primary delinquent loans decreased 20% year over year in the quarter.
Total expenses surged 92% year over year to $338 million, primarily due to impairment of goodwill and amortization of intangible assets in the quarter.
Segment Update
Net premiums earned by Mortgage Insurance segment were $229 million, up 3% year over year. Claims paid were $91.3 million in the quarter, up 1% year over year. Loss ratio improved 1420 basis points to 7.7%.
The Mortgage and Real Estate Services segment reported 5% year-over-year decline in total revenue to $40 million. Pre-tax operating income of $1.2 million was lower than an operating income of $1.5 million in the year-ago quarter.
Financial Update
Radian Group ended the quarter with a cash balance of $56.9 million, up 3% year over year.
Long-term debt was $989 million, down 23% year over year.
Book value per share, a measure of net worth, grew 3% year over year to $13.54 as of Jun 30, 2017.
Business Update
The company expects to restructure its business. Restructuring charges are likely to be within $25 million on a pre-tax basis.
Zacks Rank
Radian Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Performance of Other Insurers
Among other players from the insurance industry that have reported their second-quarter earnings so far, the bottom line of Brown & Brown, Inc. (BRO - Free Report) and Fidelity National Financial, Inc. (FNF - Free Report) have topped their respective Zacks Consensus Estimates, while The Progressive Corporation (PGR - Free Report) has missed the same.
More Stock News: Tech Opportunity Worth $386 Billion in 2017
From driverless cars to artificial intelligence, we've seen an unsurpassed growth of high-tech products in recent months. Yesterday's science-fiction is becoming today's reality. Despite all the innovation, there is a single component no tech company can survive without. Demand for this critical device will reach $387 billion this year alone, and it's likely to grow even faster in the future. Zacks has released a brand-new Special Report to help you take advantage of this exciting investment opportunity. Most importantly, it reveals 4 stocks with massive profit potential. See these stocks now>>