Genworth Financial Inc. (GNW) named Martin P. Klein as its new senior vice president and chief financial officer. His appointment as senior vice president will be effective from April 11, 2011. He will become chief financial officer after the company files its 10-Q quarterly report for the first quarter of 2011.
Klein was a managing director at Barclays Capital leading the Insurance Solutions Group and Pension Solutions Group that provide strategic advisory services and capital market solutions to address business portfolio, investment, risk, asset/liability management and capital issues for insurance and pension clients.
Previously Klein was with Lehman Brothers leading its insurance advisory group. He also served senior leadership positions in investments, actuarial, product and finance at other institutions.
Genworth expects Klein’s knowledge, expertise and experience will add to its efforts in driving future profitability as well as enhance shareholder value.
Genworth reported fourth-quarter 2010 operating loss of 28 cents, lagging the Zacks Consensus earnings estimate of 16 cents. Results were considerably lower than the operating profit of 19 cents reported in fourth-quarter 2009. A substantially higher year-over-year loss at the U.S. Mortgage Insurance segment partially offset by better results at Retirement & Protection and at International resulted in the company’s soft performance.
Over the last 7 days, none of the analysts covering the stock revised their estimates for the first quarter of 2011. However, over the last 30 days, 1 out of 13 analysts covering the stock lowered the estimate. Over the last 7 days as well as the last 30 days only 1 out of 13 analysts covering the stock nudged the estimates downward for 2011 and 2012.
We expect the elevated unemployment rate to continue pressuring the mortgage insurance business. Though the business is showing signs of improvement, the line is still experiencing losses. Additionally, the improvements in its other business lines are expected to be slow given the economy’s sluggish recovery.
We maintain our Underperform recommendation on Genworth. The quantitative Zacks #5 Rank (short-term Strong Sell rating) for the company indicates downward pressure on the shares over the near term.
Based in Richmond, Virginia, Genworth Financial offers a variety of products to customers in areas such as life insurance and lifestyle protection, long-term care insurance, annuities, asset management and mortgage insurance through financial intermediaries, advisors, independent distributors and sales specialists. It competes with MetLife Inc. (MET) and Prudential Financial, Inc. (PRU).
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