July 29, 2010 / 8:36 PM / 10 years ago

UPDATE 2-Genworth Financial Q2 profit lags Wall Street

* Q2 oper EPS $0.24 vs est $0.28

* Q2 premiums fall 2 pct to $1.47 bln (Adds details, background)

July 29 (Reuters) - Insurer Genworth Financial Inc (GNW.N) posted a quarterly profit below analysts’ estimates, as income from its life insurance segment fell 45 percent.

The life and mortgage insurer earned $42 million, or 8 cents a share available to common shareholders in the second quarter, compared with a net loss of $50 million, or 11 cents a share, in the year-ago quarter.

Operating profit available to common shareholders — a key measure for insurance analysts as it excludes investment gains and losses — was 24 cents a share.

Analysts on average had expected the company to earn 28 cents a share, according to Thomson Reuters I/B/E/S.

The company’s net operating income from its life insurance segment fell to $32 million from $58 million.

The company’s U.S. mortgage insurance segment, however, narrowed its loss by 70 percent to $40 million in the quarter, helped by lower new delinquencies, improved cure rates and increased loss mitigation savings.

Battered by losses from the downturn in the U.S. housing markets, Genworth had said in December its U.S. mortgage insurance business would not turn an operating profit until mid-2011. [ID:nN15226955]

Mortgage insurance is bought by homebuyers securing loans with down payments of less than 20 percent to repay the lender if there is a default.

Genworth, a component of the S&P 500 .SPX, clung to its U.S. mortgage business even as the nation's housing market nosedived.

The company has struggled in recent quarters as losses eroded capital, unnerving investors and prompting it to suspend a share buyback program. Last year, it helped raise capital by selling off a stake in its Canadian mortgage insurer, after an unsuccessful bid to be approved for federal funding.

Shares of the Richmond, Virginia-based company closed at $15.79 Thursday on the New York Stock Exchange. (Reporting by Sweta Singh in Bangalore; Editing by Unnikrishnan Nair and Maju Samuel)

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