(RTTNews) - Insurance service provider Assured Guaranty Ltd. (AGO: News ), Monday reported a third quarter loss that narrowed from last year, helped mainly by the acquisition of Financial Security Assurance Holdings Ltd. Quarterly adjusted profit breezed ahead of the analysts' expectations, as did its quarterly revenue.

The Hamilton, Bermuda-based company posted a net loss for Assured Guaranty and subsidiaries of $35.0 million or $0.22 per share for the third quarter, compared to a net loss of $63.3 million or $0.69 per share in the prior year quarter.

The result for the latest quarter included a charge $23.3 million or $0.15 per share for goodwill and settlements or pre-existing Financial Security Assurance Holdings, or FSAH, relationships.

Operating income, a non-GAAP measure, was $70.1 million or $0.44 per share, up from $26.0 million or $0.28 per share in the year-ago quarter.

Excluding FSAH acquisition-related expenses, operating income surged to $0.65 per share from $0.28 per share in the previous year quarter.

On average, 7 analysts polled by Thomson Reuters expected the company to report earnings of $0.31 per share for the third quarter. Analysts' estimates typically exclude special items.

Third quarter total revenues climbed to $388.5 million from $149.1 million in the same quarter last year. Three analysts had a consensus revenue estimate of $337.60 million for the third quarter.

Net earned premiums for the quarter jumped to $330.0 million from $85.5 million in the previous year quarter. Net investment income surged 95% to $84.7 million from $43.4 million in the third quarter of 2008, due to a higher level of average invested assets resulting from the acquisition of FSAH.
Total expenses for the third quarter increased to $280.0 million from $129.3 million in the prior year quarter.

Assured Guaranty had $142.2 million in incurred losses on credit derivatives in the quarter, compared to $30.0 million a year ago.

The company noted that its third quarter 2009 financial results are not comparable to prior reporting periods mainly as a result of the acquisition of FSAH.

In July, Assured Guaranty acquired FSAH from Dexia SA, expanding its franchise in the bond insurance industry and significantly increasing its capabilities to serve issuers and investors in the municipal, public infrastructure and structured finance sectors throughout the world.

Under the agreement, the purchase price paid by Assured was about $546 million in cash and around 22.3 million common shares of Assured. Dexia will own about 13.9% of Assured's issued common shares, as a result of this transaction.

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