Publish date:

Genworth Financial Stock Sinks

Genworth Financial's stock sunk over 10 percent after it missed third quarter estimates and an activist investor threatened to launch a proxy battle.

New York (

TheStreet

) --

Genworth Financial's

TST Recommends

(GNW) - Get Report

stock sunk over 10 percent after it missed third quarter estimates and an activist investor threatened to launch a proxy battle.

Genworth's stock plunged by $1.29 to $11.30.

The insurer reported a net income of $83 million, or $0.17 per diluted share, compared with a net income of $19 million, or $0.04 per diluted share, in the third quarter of 2009. Net operating income was $29 million, or $0.06 per diluted share, compared with net operating income of $81 million, or $0.18 per diluted share last year in the same quarter. Analysts has projected an estimate of 26 cents per share.

"Genworth's results in the quarter demonstrate continued earnings momentum in the international segment with mixed results in the U.S. reflecting the slow economy and struggling housing market, particularly in Florida," said CEO Michael Fraizer in a press release.

The losses from the mortgage segment came as a surprise to many analysts including Paul Newsome and Edward Shield of Sandler O'Neill. "The U.S. Mortgage Insurance Segment contributed a loss of $152 million to operating income, materially worse the $40 million loss in the second quarter, and worse than our expectation for a $36 million loss. The worse than expected results were driven by a worse than expected loss ratio of 263% compared to our expectation for 135%," said the analyst's in a note.

Stocks were driven down further after a conference call, in which, company executives said they were considering acquisitions in wealth management.

FrontPoint Partners hedge fund manager Steve Eisman responded negatively to the statement, threatening a proxy battle to replace the executives.

" I think it is pretty clear this was a very poor quarter, but there are larger issues here that I think you need to address. Frankly, the only accomplishment that this management team can truly point to is the survival of this company, which I don't mean to minimize, but otherwise, this management team has overseen a massive destruction of shareholder value," Eisman said on the call.

Eisman said he believes management should consider making buybacks instead of acquisitions.

"Mr. Fraizersaid that they might do bolt-on acquisitions. Do not do that. Your stock is selling at less than 40% of book value. You do a bolt-on acquisition and I will wager a proxy battle immediately to throw you out of here," Eisman said.

--Written by Maria Woehr in New York.

To contact the writer of this article, click here:

Maria Woehr

.

To follow the writer on Twitter, go to

http://twitter.com/newsgirlmw

.

To submit a news tip, send an email to:

tips@thestreet.com

.

NEW YORK (

TheStreet

)-- Three title insurers have are not demanding written indemnifications from lenders re-selling foreclosed homes.