Insurance company Genworth Financial Inc. (GNW) on Tuesday reported a profit for the first quarter that more than doubled from last year, reflecting strong results at its U.S. mortgage and life insurance divisions. The company's shares gained more than 5 percent in extended trading following the announcement of the results.
Tom McInerney, President and CEO of Genworth Financial said, "We achieved several milestones in the first quarter of 2013, including progress on our long term care premium rate increase plans, the announcement of the sale of our wealth management business, execution of the U.S. Mortgage Insurance capital plan on April 1 and reporting a profitable quarter in that business. I am pleased with the progress on execution, but we must continue to focus and take action on our plan for rebuilding shareholder value."
In the latest quarter, the company's U.S. mortgage insurance business reported operating profit of $21 million, compared with operating loss of $44 million in the year-ago period.
Total U.S. life insurance division operating earnings increased 33 percent to $85 million, reflecting favorable mortality experience across the life insurance, long term care insurance and fixed annuity product lines.
Long term care insurance net operating income declined 43 percent to $20 million. The latest quarter included $6 million of net favorable actuarial reserve and other adjustments.
Genworth Financial's net income for the first quarter was $103 million or $0.21 per share, up from $46 million or $0.09 per share in the comparable quarter last year.
Excluding items, net operating income for the quarter was $151 million or $0.30 per share, compared to $17 million or $0.03 per share in the prior-year quarter. On average, 10 analysts polled by Thomson Reuters expected the company to earn $0.27 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter declined to $2.30 billion from $2.32 billion in the same period last year. Analysts had a consensus revenue estimate of $2.49 billion.
Total premiums rose 14 percent to $1.26 billion, while net investment income declined 2 percent to $814 million. Meanwhile, insurance and investment product fees and other revenues decreased 15 percent to $289 million.
Net investment losses for the quarter totaled $28 million, compared to net investment gains of $17 million in the prior-year period.
Assets under management as of March 31, 2013 for the company's wealth management business were $23.1 billion.
GNW closed Tuesday's trading at $10.03, up $0.09 or 0.91 percent on a volume of 13.12 million shares. In after-hours, the stock further gained $0.58 or 5.78 percent to $10.61.
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