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Radian Group (RDN) Q4 Earnings & Revenues Beat Estimates
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Radian Group Inc.’s (RDN - Free Report) fourth-quarter 2017 operating income of 51 cents per share beat the Zacks Consensus Estimate by 15.91%. The bottom line also improved 24.4% year over year.
Radian Group Inc. Price, Consensus and EPS Surprise
The company benefited from a solid performance at its Mortgage Insurance segment.
Shares gained 3.35% in the trading session on Feb 1, reflecting the outperformance.
Behind the Headlines
Operating revenues grew 4% year over year to $280 million, courtesy of higher net premiums and investment income. Revenues outpaced the Zacks Consensus Estimate by 3.15%. Total revenues (including services revenues and net loss on investments and other financial instruments) came in at $317.9 million, up 15.6% year over year.
Total net premiums earned were $245.2 million, up nearly 5% year over year.
New mortgage insurance written grew 4% year over year to $14.4 billion in the quarter under review. As of Dec 31, 2017, total primary mortgage insurance in force was $200.7 billion, up 9% from $183.5 million as of Dec 31, 2016.
Persistency — percentage of mortgage insurance in force that remains in the company’s books after a 12-month period — was 81.1% as of Dec 31, 2017. The company reported persistency of 76.7% as of Dec 31, 2016.
Primary delinquent loans were 27,922, up 4% year over year in the quarter.
Total expenses decreased 13% year over year to $153.2 million, primarily on lower provision for losses, cost of services, interest expenses and amortization and impairment of other intangible assets.
Full- Year Highlights
Operating earnings of $1.82 per share for 2017 beat the Zacks Consensus Estimate of $1.75. The bottom line rose 17% over 2016.
Revenues of $1.06 billion surpassed the consensus mark of $1.05 billion and also improved 1.9% year over year.
Segment Update
Net premiums earned by Mortgage Insurance segment were $245.2 million, up nearly 5% year over year. Claims paid were $85.5 million in the reported quarter, down 26.6% year over year. Loss ratio improved 900 basis points to 14.4%.
The Mortgage and Real Estate Services segment reported 22.6% year-over-year decline in total revenues to $40.7 million. Pretax operating loss of nearly $5 million compared unfavorably with $2.6 million loss incurred in the year-ago quarter.
Restructuring charge was of $5.2 million in the quarter. Additional pretax charges of about $4 million, primarily in cash, are expected to be recognized in a year’s time.
Financial Update
Radian Group ended 2017 with a cash balance of $96 million, up 54.8% year over year.
Long-term debt was $1 billion, down nearly 4% year over year.
Book value per share, a measure of net worth, grew 4% year over year to $13.90 as of Dec 31, 2017.
Among other players from the insurance industry that have reported third-quarter earnings so far, the bottom line of The Progressive Corporation (PGR - Free Report) , The Travelers Companies, Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate.
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Radian Group (RDN) Q4 Earnings & Revenues Beat Estimates
Radian Group Inc.’s (RDN - Free Report) fourth-quarter 2017 operating income of 51 cents per share beat the Zacks Consensus Estimate by 15.91%. The bottom line also improved 24.4% year over year.
Radian Group Inc. Price, Consensus and EPS Surprise
Radian Group Inc. Price, Consensus and EPS Surprise | Radian Group Inc. Quote
The company benefited from a solid performance at its Mortgage Insurance segment.
Shares gained 3.35% in the trading session on Feb 1, reflecting the outperformance.
Behind the Headlines
Operating revenues grew 4% year over year to $280 million, courtesy of higher net premiums and investment income. Revenues outpaced the Zacks Consensus Estimate by 3.15%. Total revenues (including services revenues and net loss on investments and other financial instruments) came in at $317.9 million, up 15.6% year over year.
Total net premiums earned were $245.2 million, up nearly 5% year over year.
New mortgage insurance written grew 4% year over year to $14.4 billion in the quarter under review. As of Dec 31, 2017, total primary mortgage insurance in force was $200.7 billion, up 9% from $183.5 million as of Dec 31, 2016.
Persistency — percentage of mortgage insurance in force that remains in the company’s books after a 12-month period — was 81.1% as of Dec 31, 2017. The company reported persistency of 76.7% as of Dec 31, 2016.
Primary delinquent loans were 27,922, up 4% year over year in the quarter.
Total expenses decreased 13% year over year to $153.2 million, primarily on lower provision for losses, cost of services, interest expenses and amortization and impairment of other intangible assets.
Full- Year Highlights
Operating earnings of $1.82 per share for 2017 beat the Zacks Consensus Estimate of $1.75. The bottom line rose 17% over 2016.
Revenues of $1.06 billion surpassed the consensus mark of $1.05 billion and also improved 1.9% year over year.
Segment Update
Net premiums earned by Mortgage Insurance segment were $245.2 million, up nearly 5% year over year. Claims paid were $85.5 million in the reported quarter, down 26.6% year over year. Loss ratio improved 900 basis points to 14.4%.
The Mortgage and Real Estate Services segment reported 22.6% year-over-year decline in total revenues to $40.7 million. Pretax operating loss of nearly $5 million compared unfavorably with $2.6 million loss incurred in the year-ago quarter.
Restructuring charge was of $5.2 million in the quarter. Additional pretax charges of about $4 million, primarily in cash, are expected to be recognized in a year’s time.
Financial Update
Radian Group ended 2017 with a cash balance of $96 million, up 54.8% year over year.
Long-term debt was $1 billion, down nearly 4% year over year.
Book value per share, a measure of net worth, grew 4% year over year to $13.90 as of Dec 31, 2017.
Zacks Rank
Radian Group sports a Zacks Rank #1 (Strong Buy). 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 third-quarter earnings so far, the bottom line of The Progressive Corporation (PGR - Free Report) , The Travelers Companies, Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate.
Breaking News: Cryptocurrencies Now Bigger than Visa
The total market cap of all cryptos recently surpassed $700 billion – more than a 3,800% increase in the previous 12 months. They’re now bigger than Morgan Stanley, Goldman Sachs and even Visa! The new asset class may expand even more rapidly in 2018 as new investors continue pouring in and Wall Street becomes increasingly involved.
Zacks has just named 4 companies that enable investors to take advantage of the explosive growth of cryptocurrencies via the stock market.
Click here to access these stocks >>