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Housing

MGIC Implosion After Earnings

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By Jon C. Ogg Published
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MGIC Investment Corp. (NYSE: MTG) looks like it is visiting Implosion Row all over again after the mortgage insurer’s earnings report. The company reports that its second-quarter earnings came to a loss of $1.36 in earnings per share. To show just how bad this is, it is down $0.84 per share worse than what was expected, as Thomson Reuters had a consensus estimate of -$0.52 in earnings per share. The mortgage insurer also said that its quarterly revenues fell by some 12.5% on a year-over-year basis to $321.1 million. We had a Thomson Reuters consensus of almost $294 million.

Perhaps the logic is “who cares if you beat on sales when you lose money on every sale!”

MGIC also said that its net premiums written in the second quarter were down to $238.6 million from a level of $270.4 million for the second quarter of 2011.

We would expect MGIC trading to be very active today Shares closed at $2.45 on Wednesday and the 52-week trading range is $1.51 to $5.15. Unfortunately, shares are down more than 45% so far this morning and the shares are down around $1.30 in early trading. Many mortgage insurance peers have already imploded. Here is just one more 52-week low.

Who cares now if its book value is listed as $4.29 per share?

JON C. OGG

Photo of Jon C. Ogg
About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.

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