Genworth’s Third Quarter Earnings Miss Analysts’ Expectations


Dec. 4 2020, Updated 10:52 a.m. ET

Earnings announcement

Genworth Financial (GNW), a mortgage insurance company, reported its third quarter earnings on October 30, 2015, after the markets closed. The company reported operating EPS (earnings per share) of $0.13 for the quarter, well below analysts’ estimates of $0.22.

On a net basis, however, the company reported a loss of $0.57 per share, reflecting a planned life block sale. Net loss for the quarter was $284 million, lower than the $844 million loss reported during the same period last year. Shares of the company lost 10.3% following the earnings announcement.

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Tom McInerney, Genworth’s president and chief executive officer, commented, “Our Global Mortgage Insurance Division is performing well with strong loss ratios and U.S. MI made substantial progress towards PMIERs compliance. Long term care insurance remains challenged, but we continue to receive significant premium rate increases and claims experience remained in line with our expectations.”

What are PMIERs?

PMIERs (Private Mortgage Insurer Eligibility Requirements) are the requirements for mortgage insurers (or MIs) to be approved to insure loans acquired by Fannie Mae and Freddie Mac. These operational and financial standards provide greater confidence to market participants and policymakers in the MI industry.

Company overview

Genworth Financial’s primary business is to provide financial secuirty to its customers through mortgage insurance, wealth management, investments, and financial solutions. The company operates through three divisions: U.S. Life Insurance, Global Mortgage Insurance and Corporate, and Other.

The company operates in the following segments: U.S. Life Insurance, International Mortgage Insurance, U.S. Mortgage Insurance, International Protection, and Runoff. Its closest competitors in the United States (SPY) are American International Group (AIG), Hartford Financial Services (HIG), and Assurant (AIZ). Investors seeking diversified exposure to these companies could invest in the Financial Select Sector SPDR ETF (XLF).


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