March 1, 2011 / 11:15 PM / 8 years ago

UPDATE 1-MBIA's Q4 profit beats Street on derivatives gain

* Q4 shr $2.24 vs est shr loss $0.27

* Recorded $1.1 bln gain on reversal of mark-to-market on deals on insured derivatives

* Expenses fall 64 pct (Follows alerts)

March 1 (Reuters) - MBIA Inc , the largest bond insurer in the United States, posted fourth-quarter profit that beat market expectations, helped by a gain on insured derivatives.

October-December net income available to common shareholders was $451 million, or $2.24 per share, compared with a net loss of $240 million, or $1.16 per share, last year.

Analysts on average expected MBIA to post a net loss of 27 cents a share, excluding items, according to Thomson Reuters I/B/E/S.

MBIA recorded a $1.1 billion unrealized net gain from the reversal of the mark-to-market on insured derivatives.

The Armonk, New York-based company said total premiums earned declined 9 percent to $144.5 million, while expenses fell 64 percent to $311.6 million.

MBIA’s adjusted book value was $36.81 per share at December 31, 2010 compared with $38.94 a year ago.

The company paid a total of $290 million in net claims in connection with its second-lien residential mortgage exposures during the quarter.

MBIA said it now believes it was entitled to recover $4.4 billion related to “putbacks” of ineligible mortgages, up from its earlier estimate of $2.5 billion.

MBIA’s shares have fallen 2 percent since posting a narrower third-quarter loss in November to close down 1.4 percent at $11.05 Tuesday on the New York Stock Exchange. (Reporting by Tenzin Dekeva in Bangalore; Editing by Prem Udayabhanu)

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