Genworth swings to 4Q loss after boosting reserves in mortgage operations
Genworth Financial Inc. (GNW) swung to an unexpected loss for the fourth quarter, as the company boosted reserves for souring mortgages. The insurance company reported a loss of $161 million, or 33 cents a share, for the three months ended Dec. 31, down from an income of $40 million, or 8 cents a share, a year earlier. Genworth strengthened reserves in its mortgage insurance business by $228 million. Excluding that, the company reported an operating loss of $135 million, or 28 cents a share. The company paid $268 million in claims from its mortgage operations during the quarter. Fourth-quarter revenue rose about 5.2% to $2.59 billion from $2.46 billion a year earlier. Chairman and CEO Michael Frazier said results for the fourth quarter and year "were not acceptable." "We are taking aggressive actions on several fronts to improve performance in 2011 and beyond, including strengthening U.S. Mortgage Insurance reserves while maintaining good capital flexibility to support new business growth," Frazier said. "We are intensely focused on restoring under-performing business lines to acceptable return levels for the capital allocated while sustaining good performance in our other business lines." Genworth said the number of loan modifications slowed in the fourth quarter, as "cures as a percentage of beginning of period delinquencies declined sequentially" to 21% from 23% due to fewer modifications. Still, the company said it saved $126 million during the period through its loss-mitigation activities. Total delinquencies decreased 3% in the quarter from the third quarter. For 2010, Genworth earned $142 million, or 29 cents a share, up from a loss of $460 million, or $1.02 a share, a year earlier. Full-year revenue increased to nearly $10.1 billion from $9.07 billion for 2009. Write to Jason Philyaw.