NYSE$GNW

Genworth Financial Inc · Q1 2020 earnings

Q1 2020 earnings · · Investor relations

Briefing

Genworth experienced a net loss but made progress on its strategic objectives.

Genworth Financial reported a net loss of $66 million and adjusted operating income of $33 million for the first quarter of 2020. The company faced headwinds from the COVID-19 pandemic, which caused volatility and decline in market environments. However, it received reapprovals for its merger with China Oceanwide and extended the merger agreement to June 30, 2020.

  • Received reapprovals from NYDFS and Virginia Bureau of Insurance for the pending merger with China Oceanwide.
  • Extended the merger agreement to not later than June 30, 2020.
  • U.S. Mortgage Insurance (MI) adjusted operating income increased by 19 percent above prior year.
  • Holding company cash and liquid assets totaled $575 million, with $411 million in public debt repaid during the quarter.

Headline financials

Total Revenue

$1.84B

Previous: $2.2B-16.7%
EPS (adj)

$0.07

Previous: $0.24-70.8%
Adjusted Operating Income

$33M

No prior period
Holding Co. Cash

$575M

No prior period
Free Cash Flow

-$66M

Previous: $174M-137.9%
Net Income

-$66M

Previous: $174M-137.9%
Operating Income

$33M

Previous: $121M-72.7%
Gross Profit

$335M

Previous: $756M-55.7%
Cash & Equivalents

$2.41B

Previous: $2.02B+19.1%
Total Assets

$98.8B

Previous: $102B-3.3%
Stock-Based Comp

$10M

Previous: $6M+66.7%

Revenue & EPS history

Genworth · Revenue · Quarterly

$1.84B

Q1 2020-16.7%vs Q1 2019
Beat estimate in 14 of 16 quarters(88%)
ActualEstimate

Forward guidance

Genworth expects challenges from the COVID-19 pandemic to persist into the second quarter and potentially longer.

Tailwinds

  • The company has implemented business continuity procedures, including a global work from home policy.
  • Genworth is providing additional financial, health, and wellness resources to employees.
  • The company is following regulatory guidelines to support loss mitigation efforts for mortgage borrowers.
  • Genworth has extended grace periods for life insurance, LTC, and annuity policyholders.
  • The global MI businesses experienced limited impacts from the pandemic in the first quarter.

Headwinds

  • The COVID-19 pandemic and ensuing global economic slowdown impacted the company’s first quarter of 2020 financial results.
  • The pandemic led to unfavorable impacts in Genworth’s fixed and variable annuity products.
  • The company is anticipating a decline in purchase originations in the second half of 2020 due to lower economic activity.
  • An increase in delinquencies is expected as a result of higher unemployment.
  • The company may not receive further dividends from its MI businesses in 2020 to preserve capital.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2020

Historical avgQ1 2020

-1.2%

Avg return

Earnings day

+0.5%

Avg return

5 days after

+3.1%

Avg return

30 days after

47%

34 / 72 earnings

Positive

+25.4%

Q2 2016

Best reaction

-37.7%

Q3 2014

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+3.4%+2.1%-2.5%
Q4 2025+2.6%+1.7%+0.1%
Q3 2025+0.2%-0.9%+1.1%
Q1 2025-1.0%+0.1%+2.8%
Q4 2024-7.9%+1.0%-9.0%
Q3 2024+7.0%+9.9%+14.3%
Q2 2024-3.2%-9.5%+2.5%
Q1 2024+8.9%+12.3%+6.1%
Q4 2023-2.8%+0.0%+2.8%
Q3 2023-9.5%-7.9%+2.6%
Q2 2023+0.8%-3.1%-10.5%
Q1 2023-13.5%-4.4%+3.3%
Q4 2022-5.2%+3.0%+6.6%
Q3 2022+1.7%-2.4%+8.4%
Q2 2022-1.6%-0.7%-0.7%
Q1 2022+11.1%+9.2%+10.0%
Q4 2021+1.5%+1.3%+3.6%
Q3 2021-1.1%-0.7%-9.8%
Q2 2021+0.6%+7.5%+11.3%
Q1 2021-1.8%-2.5%-4.5%
Q4 2020-18.2%-20.2%-15.3%
Q3 2020+3.7%+4.9%+16.1%
Q2 2020-13.7%-12.0%+1.7%
Q1 2020-10.7%-8.1%-1.2%
Q4 2019-3.2%+18.2%-7.6%
Q3 2019+3.5%+0.0%-4.5%
Q2 2019+2.3%+1.0%+14.6%
Q1 2019-1.3%+0.5%-20.2%
Q4 2018-1.9%-4.4%-21.2%
Q3 2018+1.4%-1.4%+11.8%
Q2 2018+1.7%+0.0%+1.3%
Q1 2018+7.6%+9.4%+24.6%
Q4 2017+2.8%-4.2%+5.9%
Q3 2017+0.9%+1.5%+0.3%
Q2 2017-1.5%-0.3%+0.0%
Q1 2017+1.3%+0.8%-2.4%
Q4 2016-3.1%-2.0%+13.7%
Q3 2016-4.1%-3.6%-1.7%
Q2 2016+25.4%+24.6%+68.2%
Q1 2016+16.3%
Q4 2015-12.1%
Q3 2015-11.2%
Q2 2015-18.9%
Q1 2015+13.1%
Q4 2014+5.7%
Q3 2014-37.7%
Q2 2014-14.3%
Q1 2014+5.1%
Q4 2013+4.4%
Q3 2013-0.2%
Q2 2013-2.2%
Q1 2013+3.3%
Q4 2012-2.7%
Q3 2012+8.8%
Q4 2011+6.6%
Q2 2012-12.2%
Q1 2012+2.2%
Q3 2011-0.4%
Q2 2011-2.6%
Q1 2011+0.3%
Q4 2010+1.1%
Q3 2010-7.9%
Q2 2010-13.4%
Q1 2009-6.8%
Q1 2010+5.7%
Q4 2007-0.3%
Q4 2009-0.3%
Q4 2008-0.3%
Q3 2008+2.4%
Q3 2009+2.4%
Q2 2009-1.7%
Q2 2008-1.7%

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