Genworth (NYSE: GNW) Surges as Insurer Swings to Profit

Northern, WI 2/3/12 (StreetBeat) -- Genworth Financial Inc. (NYSE: GNW), the mortgage guarantor and life insurer, posted the biggest gain in the Standard & Poor’s 500 Index after swinging to a fourth-quarter profit on fewer claims tied to delinquent borrowers.

The insurer rose 15 percent to $9.26 at 10 a.m. in New York. Net income in the three months ended Dec. 31 was $107 million, or 22 cents a share, compared with a loss of $161 million, or 33 cents, a year earlier, Richmond, Virginia-based Genworth said late yesterday.

Chief Executive Officer Michael Fraizer, 53, has scaled back the retirement-products business to conserve capital as Genworth seeks to maintain sales of U.S. mortgage coverage. The company has no plans to add more capital to the U.S. mortgage insurance operation, Fraizer said today.

“In U.S. mortgage insurance, we saw improved financial performance over the past two quarters,” Fraizer said in a conference call today with analysts. “We continue to see adequate claims-paying ability and positive value in the business platform.”

Rival mortgage insurers Radian Group Inc. (NYSE: RDN) and Milwaukee- based MGIC Investment Corp. (NYSE: MTG) also rallied more than 7 percent today. American International Group Inc. (NYSE: AIG), which sells mortgage coverage in addition to life insurance and property-casualty policies, climbed 3 percent.

Genworth’s mortgage-insurance segment’s operating loss narrowed to $94 million in the fourth quarter from $352 million a year earlier, the company said. The firm, which tightened underwriting standards after the housing-market collapse, is benefitting from an increase in mortgage refinancing and a shift from Federal Housing Administration coverage to private insurance, Genworth said in a statement yesterday.

‘Very Profitable’

“Our post-2008 books of business are very profitable, significantly outperforming expectations,” Fraizer said today.

Mortgage insurers pay lenders when homeowners default and foreclosures fail to recoup costs. Competitors PMI Group Inc. and Triad Guaranty Inc. were forced by regulators to stop selling new coverage when capital fell short of required levels. Genworth has benefited from results in other businesses and outside the U.S.

Profit at the U.S. life insurance unit, which includes results from fixed annuities and long-term care coverage, gained 14 percent to $114 million. International mortgage insurance declined 20 percent to $78 million.

Genworth, which dropped by half last year, gained 23 percent from Dec. 31 through yesterday.

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LargeCap Stocks to Watch Today

Oxford, MS 3/31/2011 (Penny PayDay) -- Shares of conglomerate holding company Berkshire Hathaway were falling 2.2% to $83.62 in premarket trading Thursday following the surprise resignation of David Sokol, one of Warren Buffett's top lieutenants.

Biotech company Dendreon was popping 4.1% to $37 after the U.S. Centers for Medicare and Medicaid Services said it was leaning toward backing coverage of the company's Provenge treatment for prostate cancer.

Drybulk cargo transporter DryShips was rising 2.4% to $5.05 after reporting an increase in fourth-quarter earnings. Adjusted earnings were 24 cents a share, 2 cents below expectations.

The Federal Reserve Bank of New York has declined insurer American International Group's $15.7 billion offer to buy a subprime mortgage portfolio the government purchased from the insurer in the early days of the financial crisis. AIG was falling 1.3% to $35.60.

Software giant Microsoft was rising 0.4% to $25.70 after filing a complaint with European antitrust authorities about internet search giant Google's dominance in that region . Google was rising 0.4% to $584.33.

Used-car retailer CarMax was rising 0.2% to $34.65 after reporting fourth-quarter earnings of 39 cents a share, beating estimates by a penny.

Consumer giant Johnson & Johnson was up 0.2% to $59.50 after saying it would be overhauling its McNeil division in the wake of the company's massive over-the-counter drug recalls.

Chocolate maker Hershey said late Wednesday it will raise wholesale prices on most of its products sold in the U.S.

Automaker Nissan has refuted news reports saying that the company's leadership is eyeing a joint holding company for the Renault-Nissan alliance.

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Fed Declines AIG Offer

Oxford, MS 3/30/2011 (Penny PayDay) – In the below press release announced today by the New York Fed:

The Federal Reserve today announced that it has declined American International Group’s (AIG) offer to purchase all of the assets in Maiden Lane II LLC (MLII).

After careful review, the Federal Reserve Bank of New York (New York Fed) and the Board of Governors of the Federal Reserve System (Board) judged that the public interest in maximizing returns from any sale and promoting financial stability would be better served by an alternative approach to realizing value that is also more consistent with normal market practice.

In light of improved conditions in the secondary market for non-agency residential mortgage backed securities (RMBS), and a high level of interest by investors, the Federal Reserve believes that conditions are right for ML II to begin more extensive asset sales while taking appropriate care at all times to avoid market disruption. In light of this decision, the New York Fed has changed the investment management objective for ML II consistent with such sales.

The New York Fed, through its investment manager, BlackRock Solutions will dispose of the securities in the ML II portfolio individually and in segments over time as market conditions warrant through a competitive sales process. There will be no fixed timeframe for the sales and at each stage the Federal Reserve will only transact if the best available bid represents good value for the public.

Offering the Maiden Lane securities for sale individually and in segments rather than as a single block will give a larger set of investors opportunity to bid for the assets. The Federal Reserve believes that this will maximize sale proceeds while also reducing the likelihood that any one institution ends up with concentrated exposure to these assets.

BlackRock Solutions will offer the securities for sale using the standard bid list process in the secondary market for RMBS securities. The bid list process involves marketing a list of securities from the portfolio via multiple broker dealers to obtain the best available price for each security.

Over time, the Federal Reserve will also entertain investor inquiries to acquire specific parcels of securities where these offer superior value, though no such bid will be accepted without being put into competition with other interested investors. In such cases, investors may submit offers for parcels of securities directly (without necessarily going through a dealer.)

BlackRock Solutions is expected to circulate the first bid list sale early next week. Inquiries relating to the sales process can be made at ML2inquiries@blackrock.com. In keeping with the Federal Reserve’s commitment to enhanced transparency information will be released as soon as is practicable, while preserving the effectiveness of the asset disposition process.

The New York Fed already publishes on its website a list of all the securities in its portfolio. In order to allow the public to track progress on asset dispositions, the New York Fed will provide monthly updates on portfolio holdings and a list of the securities sold within the prior month. In addition, it will provide quarterly updates on total proceeds from sales, and the total amount purchased by each counterparty. Finally, the New York Fed will provide further details regarding these transactions, including an account showing the acquirer and the price paid for each individual security three months after the last asset is sold, ensuring timely accountability without jeopardizing the ability to generate maximum sale proceeds for the public.

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Some LargeCap Stocks to Keep an Eye on Today

Department store J.C. Penney reported that fourth-quarter net income grew 35.5% to $271 million, or $1.13 a share, from $200 million, or 84 cents a share, a year earlier. Adjusted earnings per share from continuing operations were $1.23. Net sales increased about 3% to $5.7 billion from $5.55 billion. On average, analysts were calling for earnings of $1.08 a share on revenue of $5.7 billion. Shares of J.C. Penney were rising 1.6% to $37.15 in premarket trading Friday.

Aerospace giant Boeing was awarded a $35 billion contract by the Pentagon for an aerial refueling tanker jet. Shares of Boeing were rising 4.9% to $74.25 in premarket trading Friday.

American International Group reported net income of $11.2 billion and earnings per share of $16.60 for the fourth quarter of 2010. Shares of AIG were up 0.7% to $41.72 in premarket trading.

TV network CBS and Warner Bros. Television have decided to end production for the rest of the season on TV comedy Two and a Half Men because of comments star Charlie Sheen made about the show's producer. CBS was up 0.3% to $22.10.

Footwear company Deckers Outdoor reported heavy demand for its UGG brand boots. The stock was jumping 7.7% to $96.75 in premarket trading.

San Francisco-based cloud computing company Salesforce.com crushed the consensus view for its fourth-quarter results. Shares of the company were higher in premarket trading, surging 9.4% to $147.

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Some LargeCap Stocks to Keep an Eye on Today

Dow component and beverage giant Coca-Cola said fourth-quarter earnings soared to $5.77 billion, or $2.46 a share, from $1.54 billion, or 66 cents a share, a year earlier. On an adjusted basis, earnings per share were 72 cents. Fourth quarter net revenue rose 40% to $10.49 billion from $7.51 billion a year earlier. Analysts, on average, were expecting earnings of 72 cents a share on revenue of $9.75 billion. Shares of Coca-Cola rose 1.2% to $63.65 during premarket trading Wednesday.

Insurer American International Group said Wednesday it expects to record a fourth-quarter charge of $4.1 billion to boost loss reserves in its Chartis property and casualty insurance units. Shares of the insurer rose 0.3% to $42.50.

Cisco Systems is due to report earnings after the market closes Wednesday. Last quarter, Cisco disappointed but it didn't prompt a wider selloff among tech stocks. Wall Street is calling for the tech bellwether to report a fiscal second-quarter profit of 35 cents a share on revenue of $10.23 billion. Shares of Cisco fell 0.2% to $21.95 in premarket trading Wednesday.

Sanofi-Aventis, the French drugmaker, said fourth-quarter earnings fell 64% to €437 million ($596.5 million) as it recorded €880 million in restructuring charges in the quarter. Shares of the company were down 1.5% to $34.44.

Entertainment giant Walt Disney reported Tuesday that first-quarter earnings rose more than 50% from the same period last year, driven by a 10% gain in revenue. Shares of the company popped 4.7% to $43.10 in premarket trading.

3M announced Tuesday a dividend increase and a fresh $7 billion buyback. The stock rose 0.6% to $90.

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