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MGIC Investment (MTG) Q2 Earnings Top, Revenues Miss Estimates
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MGIC Investment Corporation (MTG - Free Report) reported second-quarter 2022 operating net income per share of 81 cents, which beat the Zacks Consensus Estimate by 50% and our estimate of 52 cents. The reported figure increased 84% year over year.
The insurer witnessed higher premiums, offset by higher expenses.
MGIC Investment Corporation Price, Consensus and EPS Surprise
Insurance in force increased 9.5% from the prior-year quarter to $286.8 billion. However, it compared unfavorably with our estimate of $303.2 billion.
The insurer witnessed a 37.5% decrease in primary delinquency to 26,885 loans.
MGIC Investment recorded total operating revenues of $297.9 million, which increased 0.7% year over year on higher premiums earned. The top line missed the consensus mark by 2.7%.
Net premiums written increased 1.7% year over year to $244.3 million. The increase was due to an increase in insurance in force.
Net investment income decreased 2% year over year to $40.3 million.
Persistency — the percentage of insurance remaining in force from one year prior — was 71.5% as of Jun 30, 2022, up from 57.1% in the year-ago quarter. It compares favorably with our estimate of 68.7%.
New insurance written was $24.3 billion, down 27.7% year over year due to a decrease in the refinance market. It compares unfavorably with our estimate of $34.9 billion.
Net underwriting and other expenses totaled $56.4 million, down 0.7% year over year.
For the quarter under review, the loss ratio was (38.7)% compared with 11.6% for the second quarter of 2021.
Financial Update
Book value per share, a measure of net worth, declined 1% from 2021-end to $14.97 as of Jun 30, 2022.
Shareholder equity was $4.6 billion as of Jun 30, 2022, down 61% from 2021 end.
MGIC's PMIERs Available Assets totaled $5.8 billion, or $2.6 billion above its Minimum Required Assets as of Jun 30, 2022.
Assets were $6.6 billion as of Jun 30, 2022, down 9.6% from 2021 end.
Debt was $918 million as of Jun 30, 2022, down 23.5% from 2021 end.
Capital Deployment
MGIC Investment paid out dividends of $400 million to its holding company. It paid 8 cents in dividend per common share to shareholders during second-quarter 2022.
It bought back shares worth $93.6 million in the second quarter and another $28 million worth in July.
Of the insurance industry players that have reported second-quarter results so far, Radian Group (RDN - Free Report) beat the Zacks Consensus Estimate while that of Assurant, Inc. (AIZ - Free Report) and Prudential Financial Inc. (PRU - Free Report) missed the mark
Radian’s adjusted operating income of $1.36 per share beat the Zacks Consensus Estimate by 51.1% and increased 81.3% year over year. Operating revenues increased 2.3% year over year to $328.7 million on higher net investment income.
Net premiums earned were $253.9 million, down 0.3% year over year. Primary mortgage insurance in force was $254.2 billion as of Jun 30, 2022, up 7.1% year over year. Primary delinquent loans were 21,861 as of Jun 30, 2022, compared with 40,464 in the year-ago quarter.
Assurant’s net operating income of $2.95 per share missed the Zacks Consensus Estimate by 8.1% and decreased 9% from the year-ago quarter. Total revenues increased 2.1% year over year to $2.6 billion but missed the Zacks Consensus Estimate by 2.7%. The figure was lower than our estimate of $2.7 billion.
Assurant expects 14% to 18% growth in adjusted earnings, excluding reportable catastrophes, per share, driven by share repurchases, including the return of net proceeds from the sale of Global Preneed and earnings growth in Global Lifestyle.
Prudential’s operating net income of $1.74 per share missed the Zacks Consensus Estimate by 33.6% and decreased 51.7% year over year. Prudential Financial's results reflect the poor performance of Prudential Global Investment Management (PGIM), U.S. Businesses and International businesses.
Total revenues of $13.8 billion increased 9.2% year over year and beat the Zacks Consensus Estimate by 9.7%.
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MGIC Investment (MTG) Q2 Earnings Top, Revenues Miss Estimates
MGIC Investment Corporation (MTG - Free Report) reported second-quarter 2022 operating net income per share of 81 cents, which beat the Zacks Consensus Estimate by 50% and our estimate of 52 cents. The reported figure increased 84% year over year.
The insurer witnessed higher premiums, offset by higher expenses.
MGIC Investment Corporation Price, Consensus and EPS Surprise
MGIC Investment Corporation price-consensus-eps-surprise-chart | MGIC Investment Corporation Quote
Operational Update
Insurance in force increased 9.5% from the prior-year quarter to $286.8 billion. However, it compared unfavorably with our estimate of $303.2 billion.
The insurer witnessed a 37.5% decrease in primary delinquency to 26,885 loans.
MGIC Investment recorded total operating revenues of $297.9 million, which increased 0.7% year over year on higher premiums earned. The top line missed the consensus mark by 2.7%.
Net premiums written increased 1.7% year over year to $244.3 million. The increase was due to an increase in insurance in force.
Net investment income decreased 2% year over year to $40.3 million.
Persistency — the percentage of insurance remaining in force from one year prior — was 71.5% as of Jun 30, 2022, up from 57.1% in the year-ago quarter. It compares favorably with our estimate of 68.7%.
New insurance written was $24.3 billion, down 27.7% year over year due to a decrease in the refinance market. It compares unfavorably with our estimate of $34.9 billion.
Net underwriting and other expenses totaled $56.4 million, down 0.7% year over year.
For the quarter under review, the loss ratio was (38.7)% compared with 11.6% for the second quarter of 2021.
Financial Update
Book value per share, a measure of net worth, declined 1% from 2021-end to $14.97 as of Jun 30, 2022.
Shareholder equity was $4.6 billion as of Jun 30, 2022, down 61% from 2021 end.
MGIC's PMIERs Available Assets totaled $5.8 billion, or $2.6 billion above its Minimum Required Assets as of Jun 30, 2022.
Assets were $6.6 billion as of Jun 30, 2022, down 9.6% from 2021 end.
Debt was $918 million as of Jun 30, 2022, down 23.5% from 2021 end.
Capital Deployment
MGIC Investment paid out dividends of $400 million to its holding company. It paid 8 cents in dividend per common share to shareholders during second-quarter 2022.
It bought back shares worth $93.6 million in the second quarter and another $28 million worth in July.
Zacks Rank
MGIC Investment currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Some Other Multi-line Insurers
Of the insurance industry players that have reported second-quarter results so far, Radian Group (RDN - Free Report) beat the Zacks Consensus Estimate while that of Assurant, Inc. (AIZ - Free Report) and Prudential Financial Inc. (PRU - Free Report) missed the mark
Radian’s adjusted operating income of $1.36 per share beat the Zacks Consensus Estimate by 51.1% and increased 81.3% year over year. Operating revenues increased 2.3% year over year to $328.7 million on higher net investment income.
Net premiums earned were $253.9 million, down 0.3% year over year. Primary mortgage insurance in force was $254.2 billion as of Jun 30, 2022, up 7.1% year over year. Primary delinquent loans were 21,861 as of Jun 30, 2022, compared with 40,464 in the year-ago quarter.
Assurant’s net operating income of $2.95 per share missed the Zacks Consensus Estimate by 8.1% and decreased 9% from the year-ago quarter. Total revenues increased 2.1% year over year to $2.6 billion but missed the Zacks Consensus Estimate by 2.7%. The figure was lower than our estimate of $2.7 billion.
Assurant expects 14% to 18% growth in adjusted earnings, excluding reportable catastrophes, per share, driven by share repurchases, including the return of net proceeds from the sale of Global Preneed and earnings growth in Global Lifestyle.
Prudential’s operating net income of $1.74 per share missed the Zacks Consensus Estimate by 33.6% and decreased 51.7% year over year. Prudential Financial's results reflect the poor performance of Prudential Global Investment Management (PGIM), U.S. Businesses and International businesses.
Total revenues of $13.8 billion increased 9.2% year over year and beat the Zacks Consensus Estimate by 9.7%.