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Radian Group (RDN) Q3 Earnings Beat Estimates, Premiums Rise
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Radian Group Inc.’s (RDN - Free Report) third-quarter 2017 operating income of 46 cents per share beat the Zacks Consensus Estimate by 9.5%. The bottom line also improved 12% year over year.
The company benefited from positive trends in the credit environment and a strong demand for the core products in both business segments
Behind the Headlines
Operating revenues grew 3% year over year to $270 million, courtesy higher net premiums. However, lower investment income and service revenues suffered a decline.
New mortgage insurance written (NIW) declined 3% year over year to $15.1 billion in the quarter. As of Sep 30, 2017, total primary mortgage insurance in force was $196.5 billion, up 8% from $181.2 million as of Sep 30, 2016.
Persistency — percentage of mortgage insurance in force that remains in the company’s books after a 12-month period — was 80% as of Sep 30, 2017. The company reported persistency of 74% as of Sep 30, 2016.
Primary delinquent loans remained flat year over year in the quarter.
Total expenses increased 7.9% year over year to $209.2 million, primarily due to restructuring and exit costs, other operating expenses, loss on induced conversion and debt extinguishment in the quarter.
Segment Update
Net premiums earned by Mortgage Insurance segment were $236.7 million, down 0.6% year over year. Claims paid were $131.5 million in the quarter, up 59% year over year. Loss ratio improved 840 basis points to 15.2%.
The Mortgage and Real Estate Services segment reported 14.4% year-over-year decline in total revenue to $41.1 million. Pre-tax operating loss of $4.7 million compared unfavorably with $4.8 million earned in the year-ago quarter.
Financial Update
Radian Group ended the quarter with a cash balance of $98.8 million, up 75% year over year.
Long-term debt was $1 billion, down 3.8% year over year.
Book value per share, a measure of net worth, grew 3% year over year to $13.88 as of Sep 30, 2017.
Among other players from the insurance industry that have reported third-quarter earnings so far, the bottom line at The Progressive Corporation (PGR - Free Report) , The Travelers Companies, Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) beat their respective Zacks Consensus Estimate.
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Radian Group (RDN) Q3 Earnings Beat Estimates, Premiums Rise
Radian Group Inc.’s (RDN - Free Report) third-quarter 2017 operating income of 46 cents per share beat the Zacks Consensus Estimate by 9.5%. The bottom line also improved 12% year over year.
The company benefited from positive trends in the credit environment and a strong demand for the core products in both business segments
Behind the Headlines
Operating revenues grew 3% year over year to $270 million, courtesy higher net premiums. However, lower investment income and service revenues suffered a decline.
New mortgage insurance written (NIW) declined 3% year over year to $15.1 billion in the quarter. As of Sep 30, 2017, total primary mortgage insurance in force was $196.5 billion, up 8% from $181.2 million as of Sep 30, 2016.
Persistency — percentage of mortgage insurance in force that remains in the company’s books after a 12-month period — was 80% as of Sep 30, 2017. The company reported persistency of 74% as of Sep 30, 2016.
Primary delinquent loans remained flat year over year in the quarter.
Total expenses increased 7.9% year over year to $209.2 million, primarily due to restructuring and exit costs, other operating expenses, loss on induced conversion and debt extinguishment in the quarter.
Segment Update
Net premiums earned by Mortgage Insurance segment were $236.7 million, down 0.6% year over year. Claims paid were $131.5 million in the quarter, up 59% year over year. Loss ratio improved 840 basis points to 15.2%.
The Mortgage and Real Estate Services segment reported 14.4% year-over-year decline in total revenue to $41.1 million. Pre-tax operating loss of $4.7 million compared unfavorably with $4.8 million earned in the year-ago quarter.
Financial Update
Radian Group ended the quarter with a cash balance of $98.8 million, up 75% year over year.
Long-term debt was $1 billion, down 3.8% year over year.
Book value per share, a measure of net worth, grew 3% year over year to $13.88 as of Sep 30, 2017.
Zacks Rank
Radian Group 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
Among other players from the insurance industry that have reported third-quarter earnings so far, the bottom line at The Progressive Corporation (PGR - Free Report) , The Travelers Companies, Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) beat their respective Zacks Consensus Estimate.
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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