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MGIC Investment Corporation (MTG - Free Report) reported third-quarter 2018 operating net income per share of 48 cents, surpassing the Zacks Consensus Estimate by 33.3%. The bottom line soared 50% year over year on higher revenues, lower loss and reduction in tax.
MGIC Investment Corporation Price, Consensus and EPS Surprise
Shares of the company gained 2.6% in the last trading session reflecting outperformance.
The quarter witnessed favorable operating environment including better employment, wage growth, higher housing demand and low credit losses of recently written business.
Operational Update
MGIC Investment recorded total operating revenues of $289.3 million, increasing nearly 7% year over year on higher net investment income (up 19.7%) and higher premiums earned (up 5.6%). Moreover, the top line beat the Zacks Consensus Estimate by 10.6%.
Insurance in force increased 7.7% on higher annual persistency and the addition of new business.
New insurance written was $14.5 billion, up 2.8% year over year.
As of Sep 30, 2018, the company’s primary insurance in force was $205.8 billion, up 7.7% year over year.
Persistency or the percentage of insurance remaining in force from the preceding year was 81% as of Sep 30, 2018, expanding 220 basis points (bps) year over year.
Primary delinquent inventory declined 19% year over year to 33,398 loans on Sep 30, 2018.
Net underwriting and other expenses totaled $46.8 million, up 9.1% year over year. Total loss and expenses declined 31.8% year over year to $58.6 million, primarily owing to reduced losses.
Loss ratio was 0.6% in the quarter under review compared with 12.5% a year ago. Underwriting expense ratio of 17.6% deteriorated 190 bps year over year. MGIC Investment expects new business worth $50 billion in 2018 on a strong purchase mortgage market and a potential share gain from the Federal Housing Administration.
Financial Update
Book value per share, a measure of net worth, grew nearly 5.4% year over year to $9.64 as of Sep 30, 2018.
As of Sep 30, 2018, MGIC Investment had $261 million in cash and investments, up 43.3% year over year.
Risk-to-capital ratio was 9.8:1 as of Sep 30, 2018 compared with 11.1:1 as of Sep 30, 2017.
Debt to total capital ratio was 20% at the end of the quarter.
Among other players from the insurance industry having reported third-quarter earnings so far, the bottom line of The Progressive Corporation (PGR - Free Report) beat the respective Zacks Consensus Estimate while RLI Corp (RLI - Free Report) missed expectation for the same.
Cincinnati Financial Corporation (CINF - Free Report) will report third-quarter 2018 earnings on Oct 25 and the Zacks Consensus Estimate for the same period is pegged at 78 cents per share, reflecting a year-over-year surge of 34.5%.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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MGIC Investment (MTG) Q3 Earnings, Revenues Beat Estimates
MGIC Investment Corporation (MTG - Free Report) reported third-quarter 2018 operating net income per share of 48 cents, surpassing the Zacks Consensus Estimate by 33.3%. The bottom line soared 50% year over year on higher revenues, lower loss and reduction in tax.
MGIC Investment Corporation Price, Consensus and EPS Surprise
MGIC Investment Corporation Price, Consensus and EPS Surprise | MGIC Investment Corporation Quote
Shares of the company gained 2.6% in the last trading session reflecting outperformance.
The quarter witnessed favorable operating environment including better employment, wage growth, higher housing demand and low credit losses of recently written business.
Operational Update
MGIC Investment recorded total operating revenues of $289.3 million, increasing nearly 7% year over year on higher net investment income (up 19.7%) and higher premiums earned (up 5.6%). Moreover, the top line beat the Zacks Consensus Estimate by 10.6%.
Insurance in force increased 7.7% on higher annual persistency and the addition of new business.
New insurance written was $14.5 billion, up 2.8% year over year.
As of Sep 30, 2018, the company’s primary insurance in force was $205.8 billion, up 7.7% year over year.
Persistency or the percentage of insurance remaining in force from the preceding year was 81% as of Sep 30, 2018, expanding 220 basis points (bps) year over year.
Primary delinquent inventory declined 19% year over year to 33,398 loans on Sep 30, 2018.
Net underwriting and other expenses totaled $46.8 million, up 9.1% year over year. Total loss and expenses declined 31.8% year over year to $58.6 million, primarily owing to reduced losses.
Loss ratio was 0.6% in the quarter under review compared with 12.5% a year ago. Underwriting expense ratio of 17.6% deteriorated 190 bps year over year. MGIC Investment expects new business worth $50 billion in 2018 on a strong purchase mortgage market and a potential share gain from the Federal Housing Administration.
Financial Update
Book value per share, a measure of net worth, grew nearly 5.4% year over year to $9.64 as of Sep 30, 2018.
As of Sep 30, 2018, MGIC Investment had $261 million in cash and investments, up 43.3% year over year.
Risk-to-capital ratio was 9.8:1 as of Sep 30, 2018 compared with 11.1:1 as of Sep 30, 2017.
Debt to total capital ratio was 20% at the end of the quarter.
Zacks Rank and Performance of Other Insurers
MGIC Investment sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here..
Among other players from the insurance industry having reported third-quarter earnings so far, the bottom line of The Progressive Corporation (PGR - Free Report) beat the respective Zacks Consensus Estimate while RLI Corp (RLI - Free Report) missed expectation for the same.
Cincinnati Financial Corporation (CINF - Free Report) will report third-quarter 2018 earnings on Oct 25 and the Zacks Consensus Estimate for the same period is pegged at 78 cents per share, reflecting a year-over-year surge of 34.5%.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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