Shares of Genworth Financial Inc. jumped Wednesday, a day after the insurance and wealth management services provider reported third-quarter results that exceeded expectations.
THE SPARK: The Richmond, Va., company said Tuesday that it earned $34 million, or 7 cents per share, in the three months that ended Sept. 30. That compares to a loss of $16 million, or 3 cents per share, in last year's quarter, when it recorded a $157 million investment loss.
Revenue climbed slightly to $2.54 billion in this year's quarter, and operating income totaled 25 cents per share.
THE BIG PICTURE: Analysts, on average, expected earnings of 20 cents per share on $2.59 billion in revenue, according to FactSet.
The insurance holding company's products include life, long-term care and mortgage coverage, as well as advisor-based wealth management. It sells those products through financial intermediaries, advisors, independent distributors and sales representatives.
THE ANALYSIS: The company turned in a solid quarter, with better-than-expected life insurance results and a $200 million increase in holding company liquidity, Credit Suisse analyst Thomas Gallagher said in a research note.
But Gallagher said he remains hesitant on the shares due in part to Genworth's exposure to $1 billion in debt that matures in 2014 and 2015.
"However, the cash build at the holding company and capital build at the life entities makes us feel slightly better about the company's ability to repay the maturing debt," he wrote.
SHARE ACTION: Up 8.8 percent, or 48 cents to $5.96 in afternoon trading while broader indexes fell slightly. The stock is still down almost 10 percent so far this year.