NEW YORK (TheStreet) -- Shares of MBIA Inc. (MBI - Get Report) are up 3.69% to $12.92 in after-hours trading as the company reported an adjusted pre-tax loss (a non-GAAP measure defined in the attached Explanation of Non-GAAP Financial Measures) of $99 million for the first quarter of 2014 compared with an adjusted pre-tax loss of $20 million for the same period of 2013.
However, MBIA recorded consolidated net income of $256 million, or $1.32 per diluted share, for the first quarter of 2014 compared with consolidated net income of $164 million, or 84 cents per diluted share, for the same period of 2013.
The company operates the financial guarantee insurance businesses in the industry and is a provider of asset management advisory services.
- The debt-to-equity ratio is very high at 2.73 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Insurance industry and the overall market, MBIA INC's return on equity is below that of both the industry average and the S&P 500.
- MBIA INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, MBIA INC reported lower earnings of $1.10 versus $6.33 in the prior year. For the next year, the market is expecting a contraction of 80.9% in earnings ($0.21 versus $1.10).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Insurance industry. The net income has significantly decreased by 79.2% when compared to the same quarter one year ago, falling from $636.00 million to $132.00 million.
- The share price of MBIA INC has not done very well: it is down 23.13% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- You can view the full analysis from the report here: MBI Ratings Report