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Radian Group's Q1 Earnings Beat, Revenues Miss Estimates
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Radian Group (RDN - Free Report) reported first-quarter 2025 adjusted operating income of 99 cents per share, which beat the Zacks Consensus Estimate by 4.2%. The bottom line decreased 3.9% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
The results reflected muted premiums, lower persistence, higher default loans and higher expenses.
Quarter in Detail
Operating revenues remained flat year over year at $306 million and missed the Zacks Consensus Estimate by 6.4%.
Radian Group Inc. Price, Consensus and EPS Surprise
Net premiums earned were $234 million, flat year over year. Net investment income decreased 0.9% year over year to $68.6 million.
MI New insurance written decreased 17.7% year over year to $9.5 billion.
Primary mortgage insurance in force increased 1.2% year over year to an all-time high of $274.2 billion as of March 31, 2025.
Persistency — the percentage of mortgage insurance in force that remains in the company’s books after a 12-month period — was 83.7% as of March 31, 2025, contracting 60 basis points year over year.
Primary delinquent loans were 22,758 as of March 31, 2025, up 9.2% year over year. The default rate declined from the prior quarter to 2.3%, driven by favorable credit trends.
Total expenses increased 7.4% year over year to $125.7 million on account of higher provision for losses.
Loss ratio in the first quarter of 2025 was 7% compared with 3% in the year-ago quarter. The expense ratio was 24.8, which improved 20 bps from the year-ago quarter.
Segmental Update
The Mortgage segment’s total revenues of $284.3 million decreased 0.3% year over year. Net premiums earned by the segment were $234 million, almost flat year over year. Claims paid were $4 million, which increased 33.3% year over year. The loss ratio was 6.6% compared with -2.9% in the year-ago quarter.
The All Other segment’s revenues of $36 million increased 4.4% year over year. Net premiums earned by the segment were $2.6 million, which increased 41.8% year over year. Adjusted pre-tax operating loss was $3.5 million, narrower than the prior-year quarter’s loss of $7 million.
Financial Update
As of March 31, 2025, Radian Group had a solid cash balance of $28.2 million, which dropped 41% from the 2024-end level.
The debt-to-capital ratio deteriorated 20 bps to 18.9 from the 2024-end level.
Book value per share, a measure of net worth, climbed 11% year over year to $32.48 as of March 31, 2025.
In the first quarter, the adjusted net operating return on equity was 12.7%, which contracted 140 basis points.
As of March 31, 2025, Radian Guaranty’s available assets under PMIERs totaled approximately $6 billion, resulting in PMIERs excess available assets of $2.1 billion.
Share Repurchase and Dividend Update
During the first quarter of 2025, Radian bought back 6.5 million shares worth $207 million. As of March 31, 2025, purchase authority of up to $336 million remained available under the existing program. The board of directors paid a quarterly dividend of 25.5 cents per share in the first quarter of 2025.
MGIC Investment Corporation (MTG - Free Report) reported first-quarter 2025 operating net income per share of 75 cents, which beat the Zacks Consensus Estimate by 13.6%. Moreover, the bottom line increased 15.4% year over year. Total operating revenues were $305 million, which increased 0.7% year over year on higher net investment income and net premiums earned. The top line, however, missed the consensus mark by 1.5%.
Insurance in force increased 1% from the prior-year quarter to $293.8 billion. The Zacks Consensus Estimate was $297 billion. Our estimate was $296.8 billion. Persistency — the percentage of insurance remaining in force from one year prior — was 84.7% as of March 31, 2025, down from 85.7% in the year-ago quarter. Net premiums written increased 0.7% year over year to $235 million. The figure was lower than our estimate of $238.4 million.
Prudential Financial, Inc. (PRU - Free Report) reported first-quarter 2025 adjusted operating income of $3.29 per share, which beat the Zacks Consensus Estimate by 2.5%. The bottom line rose 7.8% year over year. Total revenues of $13.4 billion declined 38% year over year and missed the Zacks Consensus Estimate by 7.7%. The decrease in revenues was due to lower premiums.
Total benefits and expenses amounted to $18.9 billion, which declined 41% year over year in the first quarter. This increase was due to lower insurance and annuity benefits, interest expense and operating expenses. The figure was higher than our estimate of $13 billion.
Everest Group (EG - Free Report) reported first-quarter 2025 operating income of $6.45 per share, which missed the Zacks Consensus Estimate by 13.5%. The bottom line dropped 60.5% year over year. Total operating revenues of nearly $4.3 billion increased 3.1% year over year on higher premiums earned and net investment income. The top line missed the consensus mark by 4.5%.
Gross written premiums declined 2% year over year to $4.4 billion, attributable to a 1.1% decline in Reinsurance and 0.1% lower gross written premiums in Insurance. The combined ratio deteriorated 1390 basis points (bps) year over year to 102.7 in the reported quarter. The Zacks Consensus Estimate was pegged at 99, while our estimate was pinned at 93.
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Radian Group's Q1 Earnings Beat, Revenues Miss Estimates
Radian Group (RDN - Free Report) reported first-quarter 2025 adjusted operating income of 99 cents per share, which beat the Zacks Consensus Estimate by 4.2%. The bottom line decreased 3.9% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
The results reflected muted premiums, lower persistence, higher default loans and higher expenses.
Quarter in Detail
Operating revenues remained flat year over year at $306 million and missed the Zacks Consensus Estimate by 6.4%.
Radian Group Inc. Price, Consensus and EPS Surprise
Radian Group Inc. price-consensus-eps-surprise-chart | Radian Group Inc. Quote
Net premiums earned were $234 million, flat year over year. Net investment income decreased 0.9% year over year to $68.6 million.
MI New insurance written decreased 17.7% year over year to $9.5 billion.
Primary mortgage insurance in force increased 1.2% year over year to an all-time high of $274.2 billion as of March 31, 2025.
Persistency — the percentage of mortgage insurance in force that remains in the company’s books after a 12-month period — was 83.7% as of March 31, 2025, contracting 60 basis points year over year.
Primary delinquent loans were 22,758 as of March 31, 2025, up 9.2% year over year. The default rate declined from the prior quarter to 2.3%, driven by favorable credit trends.
Total expenses increased 7.4% year over year to $125.7 million on account of higher provision for losses.
Loss ratio in the first quarter of 2025 was 7% compared with 3% in the year-ago quarter. The expense ratio was 24.8, which improved 20 bps from the year-ago quarter.
Segmental Update
The Mortgage segment’s total revenues of $284.3 million decreased 0.3% year over year. Net premiums earned by the segment were $234 million, almost flat year over year. Claims paid were $4 million, which increased 33.3% year over year. The loss ratio was 6.6% compared with -2.9% in the year-ago quarter.
The All Other segment’s revenues of $36 million increased 4.4% year over year. Net premiums earned by the segment were $2.6 million, which increased 41.8% year over year. Adjusted pre-tax operating loss was $3.5 million, narrower than the prior-year quarter’s loss of $7 million.
Financial Update
As of March 31, 2025, Radian Group had a solid cash balance of $28.2 million, which dropped 41% from the 2024-end level.
The debt-to-capital ratio deteriorated 20 bps to 18.9 from the 2024-end level.
Book value per share, a measure of net worth, climbed 11% year over year to $32.48 as of March 31, 2025.
In the first quarter, the adjusted net operating return on equity was 12.7%, which contracted 140 basis points.
As of March 31, 2025, Radian Guaranty’s available assets under PMIERs totaled approximately $6 billion, resulting in PMIERs excess available assets of $2.1 billion.
Share Repurchase and Dividend Update
During the first quarter of 2025, Radian bought back 6.5 million shares worth $207 million. As of March 31, 2025, purchase authority of up to $336 million remained available under the existing program. The board of directors paid a quarterly dividend of 25.5 cents per share in the first quarter of 2025.
Zacks Rank
RDN 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 Other Insurers
MGIC Investment Corporation (MTG - Free Report) reported first-quarter 2025 operating net income per share of 75 cents, which beat the Zacks Consensus Estimate by 13.6%. Moreover, the bottom line increased 15.4% year over year. Total operating revenues were $305 million, which increased 0.7% year over year on higher net investment income and net premiums earned. The top line, however, missed the consensus mark by 1.5%.
Insurance in force increased 1% from the prior-year quarter to $293.8 billion. The Zacks Consensus Estimate was $297 billion. Our estimate was $296.8 billion. Persistency — the percentage of insurance remaining in force from one year prior — was 84.7% as of March 31, 2025, down from 85.7% in the year-ago quarter. Net premiums written increased 0.7% year over year to $235 million. The figure was lower than our estimate of $238.4 million.
Prudential Financial, Inc. (PRU - Free Report) reported first-quarter 2025 adjusted operating income of $3.29 per share, which beat the Zacks Consensus Estimate by 2.5%. The bottom line rose 7.8% year over year. Total revenues of $13.4 billion declined 38% year over year and missed the Zacks Consensus Estimate by 7.7%. The decrease in revenues was due to lower premiums.
Total benefits and expenses amounted to $18.9 billion, which declined 41% year over year in the first quarter. This increase was due to lower insurance and annuity benefits, interest expense and operating expenses. The figure was higher than our estimate of $13 billion.
Everest Group (EG - Free Report) reported first-quarter 2025 operating income of $6.45 per share, which missed the Zacks Consensus Estimate by 13.5%. The bottom line dropped 60.5% year over year. Total operating revenues of nearly $4.3 billion increased 3.1% year over year on higher premiums earned and net investment income. The top line missed the consensus mark by 4.5%.
Gross written premiums declined 2% year over year to $4.4 billion, attributable to a 1.1% decline in Reinsurance and 0.1% lower gross written premiums in Insurance. The combined ratio deteriorated 1390 basis points (bps) year over year to 102.7 in the reported quarter. The Zacks Consensus Estimate was pegged at 99, while our estimate was pinned at 93.