Dienstag, 30.04.2019 23:15 von PR Newswire | Aufrufe: 194

Genworth Financial Announces First Quarter 2019 Results

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PR Newswire


RICHMOND, Va., April 30, 2019 /PRNewswire/ --

  • Merger Agreement With China Oceanwide Holdings Group Co., LTD (Oceanwide) Extended To June 30, 2019; Parties Diligently Pursuing Canadian Approval
  • U.S. Mortgage Insurance (MI) Adjusted Operating Income Of $124 Million, With $9.6 Billion In New Insurance Written (NIW) And Strong Loss Ratio Performance
  • U.S. MI's PMIERs1 Sufficiency Ratio At 123 Percent, More Than $600 Million Above The Revised Standards Effective March 31, 2019
  • Strong Capital Levels With Substantial Capital Above Management Targets In Canada And Australia MI
  • Approximately $150 Million Incremental Annual Long Term Care Insurance (LTC) In Force Rate Actions Approved In First Quarter 2019, With A Net Present Value (NPV) Benefit Of Approximately $500 Million
  • Holding Company Cash And Liquid Assets Of $405 Million

Genworth Financial, Inc. (NYSE: GNW) today reported results for the quarter ended March 31, 2019. The company reported net income2 of $174 million, or $0.34 per diluted share, in the first quarter of 2019, compared with net income of $112 million, or $0.22 per diluted share, in the first quarter of 2018.  The company reported adjusted operating income3 of $121 million, or $0.24 per diluted share, in the first quarter of 2019, compared with adjusted operating income of $125 million, or $0.25 per diluted share, in the first quarter of 2018.

Genworth's effective tax rate for the quarter was approximately 33 percent.  This included $12 million of unfavorable charges related to the Global Intangible Low Taxed Income (GILTI) provision of the 2017 Tax Cuts and Jobs Act.  These charges are reflected in the Corporate & Other segment and are expected to continue throughout 2019 and into 2020.  The effective tax rate was also impacted by the tax effect of forward starting swap gains settled prior to the change in the corporate tax rate, which will continue to be tax effected at 35 percent as they are amortized into net investment income.

Strategic Update

Genworth and Oceanwide continue to work towards closing the previously announced proposed transaction as soon as possible.

The parties continue to diligently pursue approval of the transaction by Canadian regulators. To date, the Canadian review has centered around national security matters, including data protections and the safeguarding of our customers' personally identifiable information, consistent with the Enhanced Data Security Program that Genworth and Oceanwide have undertaken in connection with the clearance of the transaction by the Committee on Foreign Investment in the United States (CFIUS). While Genworth and Oceanwide have fully responded to all information requests received to date, the Canadian regulators have not outlined a timeframe for the completion of their review of the transaction or requested any additional information at this time.

To allow additional time for Canada's ongoing review, Genworth and Oceanwide announced on April 29, 2019 that the parties have agreed to a tenth waiver and extension of the merger agreement from April 30, 2019 to June 30, 2019.

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The parties have received approvals from all necessary U.S. regulators. Oceanwide will also need to receive clearance in China for currency conversion and the transfer of funds. Oceanwide is actively engaged in transaction discussions with the relevant Chinese authorities. Given the extension of the merger agreement, the timing of the various tranches of both the previously announced $1.5 billion Oceanwide post-closing capital plan and the $175 million post-closing capital commitment to Genworth Life Insurance Company (GLIC) from Genworth Holdings, Inc. will be deferred to reflect the later closing date.

"The merger agreement extension allows us additional time to continue our pursuit of regulatory approval in Canada, which is taking additional time and involves the complexities associated with national security related issues including the safeguarding of our customers' personally identifiable information," said Tom McInerney, president and CEO of Genworth. "We remain fully committed to obtaining Canada's regulatory approval and completing the transaction with Oceanwide as soon as possible, which we believe represents the greatest and most certain value for our stockholders."

LU Zhiqiang, chairman of Oceanwide, added: "Oceanwide remains committed to the transaction, including the $1.5 billion contribution to Genworth over time following the consummation of the transaction. We believe the transaction will bring financial stability to Genworth's businesses in the U.S. and enable us to bring insurance expertise and solutions to China. We look forward to closing the transaction as soon as possible."

Financial Performance 

Consolidated Net Income & Adjusted Operating Income




Three months ended March 31







2019


2018










Per





Per










diluted





diluted


Total  

(Amounts in millions, except per share) 


Total


share


Total


share


% change  


















Net income available to Genworth's common stockholders 


$

174


$

0.34


$

112


$

0.22


55 %

Adjusted operating income 


$

121


$

0.24


$

125


$

0.25


(3)%

Weighted-average diluted common shares 



508.6






502.7



























As of March 31







2019


2018




Book value per share 





$

25.98





$

26.00




Book value per share, excluding accumulated other comprehensive 
















     income (loss) 





$

21.03





$

20.76




Net income in the first quarter of 2019 benefitted from net investment gains, net of taxes and other adjustments, of $56 million in the quarter, driven by a combination of net mark-to-market gains primarily from limited partnerships and gains from the sales, exchanges and tenders of certain securities.  Net income in the first quarter of 2018 was reduced by net investment losses, net of taxes and other adjustments, of $13 million.

Net investment income was $829 million in the quarter, up from $815 million in the prior quarter and $804 million in the prior year.  Net investment income increased compared to the prior quarter and the prior year due to higher purchase yields on new investments and higher income from limited partnerships.  The reported yield and the core yield3 for the quarter were 4.71 percent and 4.67 percent, respectively, compared to 4.64 percent and 4.58 percent, respectively, in the prior quarter.

Adjusted operating income (loss) results by business line are summarized in the table below:

Adjusted Operating Income (Loss)










(Amounts in millions)


Q1 19 


Q4 18 


Q1 18

U.S. Mortgage Insurance


$

124


$

124


$

111

Canada Mortgage Insurance



41



48



49

Australia Mortgage Insurance



14



18



19

U.S. Life Insurance



(5)



(425)



(5)

Runoff



20



(2)



10

Corporate and Other



(73)



(54)



(59)

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