NEW YORK (TheStreet) --Genworth Financial (GNW) shares were higher in pre-market trading Wednesday as analysts and investors found reasons for bullishness despite the fact that the insurer missed consensus expectations.
Genworth earned $0.06 per share versus consensus expectations of $0.11, while announcing the resignation of Chairman and CEO Michael Frazier.
Genworth's international mortgage and U.S. life operations were the reason for the miss, according to Sandler O'Neill analyst Ed Shields. Meanwhile, U.S. mortgage insurance, which has been Genworth's biggest problem since the 2008 financial crisis, was better than expected.
"Backing out a number of one-time items, normalized earnings were $0.15 and in line with our expectations," Shields wrote.As for Frazier's resignation, BTIG analyst Mark Palmer argued it is a bullish sign. "We believe the stock will react positively to the changes given the frustration that many investors had expressed during the latter stages of Frazier's tenure, and hopes that new leadership will help to finally unlock the company's inherent value," Palmer wrote. While Genworth has struggled ever since the 2008 crisis as a result of its U.S. mortgage insurance unit, its latest woes have come from Australian mortgage insurance. Shares plummeted some 24% in a single day last month after larger-than-expected losses caused the company to postpone a planned initial public offering of those operations. BTIG's Palmer, however, saw a silver lining in the Australian unit from Tuesday's results, noting that they were the result of extensive flooding in the Queensland region. "We are encouraged by the fact that overall delinquencies were flat versus the prior quarter, implying that the quarterly weakness was confined to Queensland and was not an indication of broader deterioration," Palmer wrote. Genworth shares were higher in pre-market trading Wednesday ahead of a conference call scheduled to begin before the opening bell. -- Written by Dan Freed in New York. Follow this writer on Twitter
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