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Genworth says mortgage business may post loss in second half
July 30, 2013 / 9:18 PM / 4 years ago

Genworth says mortgage business may post loss in second half

(Reuters) - Life and mortgage insurer Genworth Financial Inc’s (GNW.N) quarterly profit missed analysts’ estimates and the company said it expects its mortgage insurance business to post a marginal net loss in the second half of the year.

Genworth shares fell 6 percent in after-hours trading.

The company said it expected seasonality in the remainder of the year to hurt the U.S. mortgage unit, which reported profit for two straight quarters after years of losses.

Mortgage insurance protects lenders in cases where home buyers fall behind in their mortgage payments.

Genworth, which was once part of industrial conglomerate General Electric (GE.N), has been realigning its business amid increasing regulatory pressure about its debt.

It has separated the mortgage insurance business, sold its wealth management and alternative investment unit and cut 400 jobs so far this year, as it looks to cut costs and manage its long-term debt, which was at $4.77 billion as of March 31.

The company’s net income rose 86 percent to $141 million, or 28 cents per share, in the second quarter, from a year earlier.

Operating profit was 27 cents per share. Analysts on average had expected earnings of 29 cents per share, excluding items, according to Thomson Reuters I/B/E/S.

Genworth shares, which have gained more than 75 percent this year, were at $12.65 in trading after the bell. They closed at $13.36 on the New York Stock Exchange on Tuesday.

Reporting by Aman Shah in Bangalore; Editing by Saumyadeb Chakrabarty, Maju Samuel

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