Genworth Financial (NYSE: GNW) reported strong fourth quarter earnings of $107 million, up from a $161 loss in the fourth quarter of 2010 and beating analysts’ estimates. Earnings per share were 22 cents compared with a loss of 33 cents in the fourth quarter of 2010.
In its quarterly report, Genworth noted the move away from certain business channels in order to focus on profitable business segments. It cited strong life insurance business and a still-struggling mortgage insurance unit as leading to its quarterly results.
During the quarter, the company reported an increase in corporate and other net operating loss, attributing the greater loss to goodwill associated with the company’s reverse mortgage business. Genworth acquired Liberty Reverse in November 2007 for $50 million and was the first major insurance provider to acquire a reverse mortgage lender.
During the fourth quarter, Genworth reported a non-cash impairment charge of $19 million to write off all of the goodwill associated with the reverse mortgage business, the company reported, indicating that it had overvalued the acquisition by that amount.
“Corporate and Other’s net operating loss was $63 million, compared with $45 million in the prior year quarter, driven primarily by a $19 million after-tax impairment of all the goodwill associated with the reverse mortgage business,” the company stated in its earnings report.
“For Genworth, 2011 was a year of repositioning actions to move the company through an uncertain environment and provide a foundation for improved shareholder value. We made progress in several areas and will maintain an intense execution focus during 2012.” said Michael Frazier, Genworth chairman and CEO. “At business portfolio and product line levels, we took important steps to improve our focus, strengthen risk buffers and capital generation, and support future redeployment of capital.”
Genworth’s stock price rose 7% to $8.62 per share following the announcement Thursday.
Written by Elizabeth Ecker
