NEW YORK (AP) - Shares of Genworth Financial Inc. plunged Friday, a day after the insurer and financial-services company's second-quarter results widely missed Wall Street's expectations.
THE SPARK: Late Thursday, Genworth said its second-quarter income totaled $42 million, or 8 cents per share, compared with a loss of $50 million, or 11 cents per share, in the year-ago period. On an adjusted basis, net operating income was 24 cents a share. That fell short of the Wall Street consensus estimate of 28 cents per share, according to an analyst poll by Thomson Reuters.
THE BIG PICTURE: Genworth's insurance business, especially its mortgage insurance division, was hit hard over the last year and a half by investment losses due to deteriorating financial conditions and a slumping housing market. The outlook has improved, but a 45 percent decline in life insurance income during the second quarter spooked investors.
Mortgage-insurance policies cover losses when borrowers default and lenders are unable to recover their losses.
SHARE ACTION: Shares of the Richmond, Va., company fell $2.21, or 14 percent, to close at $13.58 Friday. The stock has ranged from $6.45 to $19.36 over the past year.