Skip to main content

Genworth benefited from results at units that back mortgages.Fernando Morales/The Globe and Mail

Genworth Financial Inc. posted its first profit in three quarters as the insurer benefited from results at units that back mortgages.

Net income slipped to $154-million (U.S.) from $184-million a year earlier, Genworth said Tuesday in a statement. That compares with net losses of more than $750-million in each of the last two periods of 2014.

First-quarter operating profit, which excludes some investment results, was 31 cents a share, beating the 25-cent average estimate of 10 analysts surveyed by Bloomberg.

Chief executive officer Tom McInerney is seeking to turn around the company, based in Richmond, Va., after a 53-per-cent share decline in the 12 months through the close of trading Tuesday.

The losses last year were fuelled by higher-than-expected costs tied to long-term care coverage, which pays for home health aides or nursing home stays.

"Investor confidence was shaken by the long-term care episode," Mark Palmer, an analyst with BTIG, said by phone before earnings were released. "Genworth is now a show-me story, and it will require multiple quarters of stable performance before investors are going to be able to feel confident that we won't see another flare-up of these types of issues."

Mr. McInerney has been cutting jobs and seeking a buyer for a British lifestyle-protection unit that helps consumers pay debt if they become unable to meet their obligations after an accident or job loss. Genworth is also looking to sell a life-and-annuity operation, people familiar with the matter have said. Mr. McInerney needs to boost capital after ratings firms downgraded the company's debt and U.S. regulators tightened requirements for mortgage insurers.

Report an error

Tickers mentioned in this story