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Radian Group (RDN) Q1 Earnings Top Estimates, Decrease Y/Y
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Radian Group Inc. (RDN - Free Report) reported first-quarter 2023 adjusted operating income of 98 cents per share, which beat the Zacks Consensus Estimate by 29%. However, the bottom line decreased 16.2% year over year.
Operating revenues decreased 8.8% year over year to $294.1 million due to lower net premiums earned and services revenues. However, the metric beat the Zacks Consensus Estimate by 62.2%.
The results reflected higher monthly premium policy insurance in force and a decline in single premium policy insurance in force, partially offset by higher expenses.
Radian Group Inc. Price, Consensus and EPS Surprise
Net premiums earned were $233.2 million, down 8.3% year over year. Net investment income increased 55% year over year to $59.2 million.
MI New Insurance Written decreased 39.6% year over year to $11.3 billion. Primary mortgage insurance in force was $261.5 billion as of Mar 31, 2023, up 5% year over year. The year-over-year change reflects an 8% increase in monthly premium policy insurance in force and a 12% decline in single premium policy insurance in force.
Persistency — the percentage of mortgage insurance in force that remains in the company’s books after a 12-month period — was 82% as of Mar 31, 2023, up 1400 basis points (bps) year over year.
Primary delinquent loans were 20,748 as of Mar 31, 2023, down 18.7% year over year.
Total expenses increased 81.2% year over year to $106.6 million on account of higher interest expenses, amortization of other acquired intangible assets and lower provision for losses.
The expense ratio was 25.9, an improvement of 130 bps from the year-ago quarter.
Segmental Update
The Mortgage segment reported a year-over-year decrease of 1.6% in total revenues to $279.9 million. Net premiums earned by the segment were $231.5 million, down 5.6% year over year. Claims paid were $3 million, which decreased 40% year over year. The loss ratio was 7.3 compared with (34.3) in the year-ago quarter.
The homegenius segment’s revenues of $13 million decreased 61.8% year over year. Net premiums earned by the segment were $1.8 million, which decreased 80.2% year over year. Adjusted pre-tax operating loss was $23 million, wider than the prior-year quarter loss of $13.5 million.
Financial Update
As of Mar 31, 2023, Radian Group had a solid cash balance of $50.2 million, down from $56.2 billion at 2022-end. The debt-to-capital ratio improved 90 bps to 25.6 from the 2022-end level.
Book value per share, a measure of net worth, climbed 5.1% year over year to $26.23 as of Mar 31, 2023.
In the first quarter, the adjusted net operating return on equity was 15.7%, which deteriorated 420 bps year over year.
The risk-to-capital ratio of Radian Guaranty as of the first-quarter end was 10.6:1, lower than 10.7:1 from the 2022-end level.
Excess available resources to support PMIERs of $5.7 billion were 44% higher than Radian Guaranty's minimum required assets.
Share Repurchase and Dividend Update
Radian bought back 716 thousand shares worth $15 million, including commissions, in the first quarter. Radian also bought back an additional 229 thousand shares in April 2023 for $5 million, including commissions. The remaining repurchase capacity stood at $280 million as of Mar 31, 2023.
The board of directors paid a quarterly dividend of 22.5 cents per share.
Assurant, Inc. (AIZ - Free Report) reported first-quarter 2023 net operating income of $3.49 per share, which beat the Zacks Consensus Estimate by 55% and our estimate of $2.62. The bottom line decreased 12.3% from the year-ago quarter.
The decrease was primarily due to lower segment earnings, a higher effective tax rate and an increase in depreciation expense. It was partially offset by share repurchases from previous quarters.
CNO Financial Group, Inc. (CNO - Free Report) reported first-quarter 2023 adjusted earnings per share (EPS) of 51 cents, which missed the Zacks Consensus Estimate of 65 cents and our estimate of 54 cents. Also, the bottom line dropped 6% year over year.
Total revenues jumped 19.3% year over year to $1,006 million in the quarter under review. The top line beat the consensus mark by 9.5% and our estimate of $911.8 million.
The Hartford Financial Services Group, Inc. (HIG - Free Report) reported first-quarter 2023 adjusted operating earnings of $1.68 per share, which met the Zacks Consensus Estimate. The bottom line inched up 1% year over year.
Operating revenues of HIG amounted to $3,915 million, which advanced 8.6% year over year in the quarter under review. However, the top line missed the consensus mark by 1.1% but surpassed our estimate of $3,908.7 million.
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Radian Group (RDN) Q1 Earnings Top Estimates, Decrease Y/Y
Radian Group Inc. (RDN - Free Report) reported first-quarter 2023 adjusted operating income of 98 cents per share, which beat the Zacks Consensus Estimate by 29%. However, the bottom line decreased 16.2% year over year.
Operating revenues decreased 8.8% year over year to $294.1 million due to lower net premiums earned and services revenues. However, the metric beat the Zacks Consensus Estimate by 62.2%.
The results reflected higher monthly premium policy insurance in force and a decline in single premium policy insurance in force, partially offset by higher expenses.
Radian Group Inc. Price, Consensus and EPS Surprise
Radian Group Inc. price-consensus-eps-surprise-chart | Radian Group Inc. Quote
Quarter in Details
Net premiums earned were $233.2 million, down 8.3% year over year. Net investment income increased 55% year over year to $59.2 million.
MI New Insurance Written decreased 39.6% year over year to $11.3 billion.
Primary mortgage insurance in force was $261.5 billion as of Mar 31, 2023, up 5% year over year. The year-over-year change reflects an 8% increase in monthly premium policy insurance in force and a 12% decline in single premium policy insurance in force.
Persistency — the percentage of mortgage insurance in force that remains in the company’s books after a 12-month period — was 82% as of Mar 31, 2023, up 1400 basis points (bps) year over year.
Primary delinquent loans were 20,748 as of Mar 31, 2023, down 18.7% year over year.
Total expenses increased 81.2% year over year to $106.6 million on account of higher interest expenses, amortization of other acquired intangible assets and lower provision for losses.
The expense ratio was 25.9, an improvement of 130 bps from the year-ago quarter.
Segmental Update
The Mortgage segment reported a year-over-year decrease of 1.6% in total revenues to $279.9 million. Net premiums earned by the segment were $231.5 million, down 5.6% year over year. Claims paid were $3 million, which decreased 40% year over year. The loss ratio was 7.3 compared with (34.3) in the year-ago quarter.
The homegenius segment’s revenues of $13 million decreased 61.8% year over year. Net premiums earned by the segment were $1.8 million, which decreased 80.2% year over year. Adjusted pre-tax operating loss was $23 million, wider than the prior-year quarter loss of $13.5 million.
Financial Update
As of Mar 31, 2023, Radian Group had a solid cash balance of $50.2 million, down from $56.2 billion at 2022-end. The debt-to-capital ratio improved 90 bps to 25.6 from the 2022-end level.
Book value per share, a measure of net worth, climbed 5.1% year over year to $26.23 as of Mar 31, 2023.
In the first quarter, the adjusted net operating return on equity was 15.7%, which deteriorated 420 bps year over year.
The risk-to-capital ratio of Radian Guaranty as of the first-quarter end was 10.6:1, lower than 10.7:1 from the 2022-end level.
Excess available resources to support PMIERs of $5.7 billion were 44% higher than Radian Guaranty's minimum required assets.
Share Repurchase and Dividend Update
Radian bought back 716 thousand shares worth $15 million, including commissions, in the first quarter. Radian also bought back an additional 229 thousand shares in April 2023 for $5 million, including commissions. The remaining repurchase capacity stood at $280 million as of Mar 31, 2023.
The board of directors paid a quarterly dividend of 22.5 cents per share.
Zacks Rank
Radian Group currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Multi-line Insurers
Assurant, Inc. (AIZ - Free Report) reported first-quarter 2023 net operating income of $3.49 per share, which beat the Zacks Consensus Estimate by 55% and our estimate of $2.62. The bottom line decreased 12.3% from the year-ago quarter.
The decrease was primarily due to lower segment earnings, a higher effective tax rate and an increase in depreciation expense. It was partially offset by share repurchases from previous quarters.
CNO Financial Group, Inc. (CNO - Free Report) reported first-quarter 2023 adjusted earnings per share (EPS) of 51 cents, which missed the Zacks Consensus Estimate of 65 cents and our estimate of 54 cents. Also, the bottom line dropped 6% year over year.
Total revenues jumped 19.3% year over year to $1,006 million in the quarter under review. The top line beat the consensus mark by 9.5% and our estimate of $911.8 million.
The Hartford Financial Services Group, Inc. (HIG - Free Report) reported first-quarter 2023 adjusted operating earnings of $1.68 per share, which met the Zacks Consensus Estimate. The bottom line inched up 1% year over year.
Operating revenues of HIG amounted to $3,915 million, which advanced 8.6% year over year in the quarter under review. However, the top line missed the consensus mark by 1.1% but surpassed our estimate of $3,908.7 million.