This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

MGIC Losses Mash Mortgage Sector

MGIC Investment (MTG - Get Report) plunged 11% after the mortgage insurer reported a big third-quarter loss and said it doesn't expect to return to profitability in the fourth quarter or 2008.

The comments spurred a ratings downgrade and sent shares across the mortgage insurance sector tumbling. Shares in Radian (RDN - Get Report), MGIC's partner in a merger that failed to close earlier this year, fell 11%, while MGIC and Triad Guaranty (TGIC) each fell 10% and PMI (PMI) slid 8%.

For the three months ended Sept. 30, Milwaukee-based MGIC reported a loss of $372.5 million, or $4.60 a share, compared to a profit of $130 million, or $1.55 a share, in the year-ago quarter. Analysts had expected MGIC to earn 61 cents a share in the quarter.

MGIC attributed the loss to an after-tax writedown of $303 million from an impairment on its equity investment in Credit-Based Asset Servicing and Securitization, or C-Bass. C-Bass is a joint venture with Radian that invested in subprime mortgages. But the business swooned as the housing downturn worsened this summer and investors shunned mortgage-backed securities.

The company also recorded $11.3 million in pretax expenses over its failed merger with Radian, which was terminated in September, due to a decline in business and the C-Bass writedown. Offsetting the charges was a $106 million gain from MGIC's sale of a portion of its stake in a debt-recovery firm during the quarter.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
MTG $10.43 -0.76%
RDN $17.66 -1.06%
AAPL $125.80 -2.25%
FB $77.56 -1.59%
GOOG $530.80 -1.85%

Markets

DOW 17,928.20 -142.20 -0.79%
S&P 500 2,089.46 -25.03 -1.18%
NASDAQ 4,939.3270 -77.6020 -1.55%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs