Genworth, the largest U.S. long-term care insurance seller, posted a record loss of $844 million in its third-quarter financial results, which it reported on November 5. The company incurred heavy costs from setting aside funds for long-term care policies.
CEO Tom McInerney has tried to turn the business around by increasing premiums on policies previously sold, as well as increasing costs and cutting benefits for new coverage.
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More than 15.7 million shares had changed hands as of 11:48 a.m., compared to the average volume of 8,247,080.
Separately, TheStreet Ratings team rates GENWORTH FINANCIAL INC as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate GENWORTH FINANCIAL INC (GNW) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- GNW's revenue growth trails the industry average of 24.3%. Since the same quarter one year prior, revenues slightly increased by 3.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.45, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
- GENWORTH FINANCIAL 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, GENWORTH FINANCIAL INC increased its bottom line by earning $1.15 versus $0.55 in the prior year. For the next year, the market is expecting a contraction of 2.6% in earnings ($1.12 versus $1.15).
- 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 881.5% when compared to the same quarter one year ago, falling from $108.00 million to -$844.00 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Insurance industry and the overall market, GENWORTH FINANCIAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: GNW Ratings Report