* Fourth-quarter operating EPS $0.34 vs est $0.27
* Long-term care operating earnings fall 75 percent
* Shares down 2 percent after the bell
Feb 5 Genworth Financial Inc's
fourth-quarter profit topped Wall Street estimates but the
insurer reported a sharp drop in earnings from long-term care
insurance, sending its stock down 2 percent in trading after the
Once part of General Electric Co, Genworth wrote
generous long-term care policies offering long periods of
coverage and cornered a chunk of the market.
Such policies have become less profitable and the payouts
have exceeded underwriting expectations after interest rates hit
rock bottom, hurting profit from the product.
Operating earnings at the business fell 75 percent to $7
million in the fourth quarter.
Genworth has been stepping up efforts to offset the fall in
profit. It asked 49 states in December for permission to raise
premiums on such policies.
The company has also filed for a new long-term care product
that will include higher prices for unmarried women and use
blood and lab test results when writing a policy.
Genworth is, according to trade group Limra, among the top
five long-term care insurance providers, a product that is
becoming increasingly popular as the U.S. population ages.
Larger peers Prudential Financial Inc, Metlife Inc
have all stepped back from the business in recent years.
FOURTH QUARTER BEATS
Despite the steep drop in long-term care profit, Genworth's
fourth-quarter results topped Wall Street expectations on higher
income from its Canadian mortgage insurance business.
Net income available to common shareholders rose to $166
million, or 34 cents per diluted share, for the quarter ended
Dec. 31, from $142 million, or 29 cents per diluted share, a
Net operating income rose to 34 cents per share.
Analysts on average had expected earnings of 27 cents per
share, excluding items, according to Thomson Reuters I/B/E/S.
Operating income in its Canadian mortgage insurance business
more than doubled to $114 million.
Losses at the troubled U.S. mortgage insurance business more
than halved to $34 million.
Shares of the Richmond, Virginia-based company were down 2
percent at $9.00 in trading after the bell. They closed at $9.17
on the New York Stock Exchange on Tuesday.