WASHINGTON (dpa-AFX) - Bond insurer MBIA Inc. (MBI) on Thursday reported a surge in profit for the first quarter despite lower revenues. Earnings per share beat analysts' estimates.
Chuck Chaplin, President and Chief Financial Officer of MBIA said, 'This quarter's financial results and subsequent settlements reflect a continued trend toward risk reduction in our businesses. Our settlements with Bank of America, Société Générale, Flagstar and a secondary program have improved the liquidity profile and volatility of economic losses of MBIA Corp. and substantially reduced the risk of regulatory intervention against it, while at the same time allowing it to repay its secured loan from National.'
Total premiums earned for the quarter declined 12 percent from last year to $120 million, while net investment income decreased 39 percent to $38 million.
MBIA's adjusted book value or ABV was $30.56 per share at the end of the first quarter, compared to $32.00 per share at the end of the year-ago period.
MBIA's first-quarter net income was $164 million or $0.84 per share, up from $10 million or $0.05 per share in the prior-year period.
Two analysts polled by Thomson Reuters expected the company to report earnings of $0.15 per share for the quarter. Analysts' estimates typically exclude special items.
In the latest quarter, MBIA recorded $194 million reduction in losses, incurred compared with $97 million of losses incurred in the year-ago period. There were no investment losses related to other-than-temporary impairments in the quarter, compared with $94 million of losses related to other-than-temporary impairments in the same period last year.
Adjusted pre-tax loss for the quarter was $20 million, compared to adjusted pre-tax loss of $548 million in the comparable quarter last year. The narrower pre-tax loss for the quarter reflects lower net losses on insured exposures, the absence of net investment losses related to other-than-temporary impairments, gains on sales of investments, and lower operating expenses due to significantly lower legal and litigation-related costs.
Revenues for the quarter declined 43 percent to $219 million from $383 million in the same period last year.
MBIA closed Thursday's regular trading session at $15.67, up $0.19 or 1.23 percent on a volume of 19.85 million shares. In after-hours, the stock further gained $0.23 or 1.47 percent to $15.90.
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