MGIC Drops as Loss Widens to $72.9 Million at Insurer
MGIC fell 1.5 percent to $5.40 at 4:15 p.m. The net loss, swelled to $72.9 million, or 31 cents a share, from $19.6 million, or 10 cents, a year earlier when investment gains helped cushion claims costs from backing home loans, Milwaukee- based MGIC said today in a statement. It was the company’s eleventh straight unprofitable period.
The operating loss, which excludes some investment results, was 32 cents a share, missing by 18 cents the average estimate of seven analysts surveyed by Bloomberg. Losses have mounted at mortgage insurers, which pay claims when homeowners default and foreclosures fail to recoup costs, amid the deepest housing crash since the Great Depression.
“The company’s financial profile will remain under pressure,” Standard & Poor’s said in a statement last month. “Significant risk remains due to potential adverse development in loss reserves and ongoing losses from new notices of delinquency.”
MGIC sold stock and convertible notes in March to bolster capital as investors bet on surviving mortgage insurers while the government works to limit its role backing home loans. The insurer has more than doubled this year.
Radian Group Inc. (RDN), the rival that also raised capital this year, slipped 0.6 percent to $11.95. Mortgage insurers including PMI Group Inc. and Triad Guaranty Inc. (TGIC) stopped selling new policies after capital ran short.
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