Genworth Financial, Inc. (GNW - Free Report) posted first-quarter 2019 adjusted operating earnings of 24 cents per share, missing the Zacks Consensus Estimate of 26 cents by 7.7%. The bottom line declined 4% year over year.
Total revenues of Genworth Financial were $2.130 billion, down 0.7% year over year. The top line marginally missed the Zacks Consensus Estimate of $2.131 billion.
Net investment income grew 1.7% year over year to $829 million attributable to higher purchase yields on new investments and higher income from limited partnerships.
Total benefits and expenses decreased 1.3% year over year to $1.9 billion, primarily owing to lower benefits and other changes in policy reserves, interest credited and acquisition and interest expense.
Genworth Financial, Inc. Price, Consensus and EPS Surprise
U.S. Mortgage Insurance: Adjusted operating income of $124 million was up 11.1% year over year. Loss ratio improved 100 basis points (bps) year over year to 8% as favorable loss performance continues along with premium growth.
Canada Mortgage Insurance: Adjusted operating income was $41 million, down 16.2% year over year. Loss ratio deteriorated 200 bps year over year to 15% attributable to higher new delinquencies, net of cures.
Australia Mortgage Insurance: Adjusted operating income of $14 million was down 26.3% year over year. Loss ratio deteriorated 400 bps.
U.S. Life Insurance: Adjusted operating loss was $5 million, flat year over year as lower loss at Long Term Care Insurance was offset by higher loss at Life Insurance and lower income at Fixed Annuities.
Runoff: Adjusted operating income of $20 million doubled year over year.
Corporate and Other: Adjusted operating loss of $73 million was wider than $59 million loss incurred in the year-ago quarter
Genworth Financial exited the quarter with cash, cash equivalents and invested assets of $75.1 billion, down nearly 3% from the level at year-end 2018.
Long-term borrowings of Genworth Financial totaled $4 billion as of Mar 31, 2019 up 2% from 2018 end.
Book value per share (excluding accumulated other comprehensive income) was $21.03 as of Mar 31, 2019, up 1.5% from 2018 end level.
About $150 million incremental annual Long Term Care Insurance (LTC) in force rate actions was approved in the first quarter of 2019, with net present value (NPV) benefit of nearly $500 million.
The deadline for the Genworth Financial and China Oceanwide Holdings Group merger has been extended to Jun 30, 2019 as Genworth Financial agreed to a 10th waiver and agreement of each party's right to terminate the previously announced merger agreement.
Genworth Financial currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Among other insurance industry players who have reported first-quarter results so far, earnings of Torchmark Corporation (TMK - Free Report) and MGIC Corporation (MTG - Free Report) beat the respective Zacks Consensus Estimate and while that of Reinsurance Group of America Inc. (RGA - Free Report) missed the same.
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