Genworth Financial Hurt by Housing Slump
From Bloomberg News
Genworth Financial, the Richmond insurer spun off by General Electric, said profit fell 64 percent as the U.S. housing slump led to losses at its U.S. mortgage-insurance unit for the second consecutive quarter.
Profit fell to $116 million (27 cents a share), from $324 million (71 cents a share) in the comparable period a year earlier. Revenue grew 1.6 percent, to $2.75 billion.
U.S. foreclosures have led to record losses at mortgage insurers, which reimburse lenders when homeowners default. At the same time, sales of the coverage boomed as banks tightened lending standards and required more borrowers to buy insurance. Genworth's U.S. mortgage-insurance business increased policy sales 31 percent last year.
The company forecast operating earnings per share for the full year of $2.25 to $2.65. In February, the insurer said it expected results at the low end of a $2.65 to $3.15 range.
Genworth, which also sells life insurance, long-term care coverage and variable annuities, has lost about a third of its market value in the past year.
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