NEW YORK (TheStreet) -- Shares of Genworth Financial Inc. (GNW) are down 35.18% to $9.12 in early trading as the company's CEO predicted a tougher path ahead after the insurer posted a record loss, Bloomberg reports.
The financial security company reported a loss of $844 million yesterday, driven by costs tied to its long-term care insurance operation, according to Bloomberg, adding that CEO Tom McInerney apologized today for his prior remarks about the business.
"The turnaround in this business will be more difficult and prolonged," McInerney said, adding, "Despite this setback, we remain steadfast in our commitment to transform this business."
Separately, TheStreet Ratings team rates GENWORTH FINANCIAL INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate GENWORTH FINANCIAL INC (GNW) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, revenue growth, attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- GENWORTH FINANCIAL INC has improved earnings per share by 29.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, GENWORTH FINANCIAL INC increased its bottom line by earning $1.15 versus $0.55 in the prior year. This year, the market expects an improvement in earnings ($1.22 versus $1.15).
- GNW's revenue growth trails the industry average of 20.5%. Since the same quarter one year prior, revenues slightly increased by 1.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.43, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, GENWORTH FINANCIAL INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- You can view the full analysis from the report here: GNW Ratings Report