Magic Software Enterprises Ltd. (MGIC)

[mlkrborn]

MGIC 1st-Quarter Loss Widened Sharply; Shares Down: $5.10 today
Last update: 4/30/2013 8:45:05 AM


By Tess Stynes


MGIC Investment Corp.'s (MTG) first-quarter loss widened sharply as the struggling mortgage insurer posted far lower investment gains, contributing to a broader decline in revenue.
Shares were down 7.7% at $5.06 in premarket trading as the loss was wider than feared and revenue missed expectations.
MGIC Investment--the largest mortgage insurer for Fannie Mae (FNMA) and Freddie Mac (FMCC)-- has been plagued by billions in losses in recent years and is looking to keep selling coverage in several key states under a complicated plan that involves its new unit, MGIC Indemnity Corp.
Mortgage insurers cover potential lender losses on loan given to borrowers that make a less than 20% downpayment on home purchases.
MGIC Investment reported a loss of $72.9 million, or 31 cents a share, compared with a year-earlier loss of $19.6 million, or 10 cents a share. Realized gains were $1.3 million, compared with prior-year gains of $77.6 million.
Revenue decreased 29% to $269.2 million as investment income dropped 51% and net premiums earned fell 5.8%. Realized gains were a penny a share, compared with 38 cents a share a year earlier.
Analysts polled by Thomson Reuters most recently projected a loss of 14 cents a share on revenue of $279.5 million.
Net premiums written declined 2.5% to $248.5 million,
Write to Tess Stynes at [e-mail]