Radian Group Earnings: Here’s Why Investors are Selling Shares Now

Radian Group Inc. (NYSE:RDN) had a loss and missed Wall Street’s expectations, BUT beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 2.5%.

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Radian Group Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased to $-1.34 in the quarter versus EPS of $-0.92 in the year-earlier quarter.

Revenue: Decreased 38.01% to $226 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Radian Group Inc. reported adjusted EPS loss of $-1.34 per share. By that measure, the company missed the mean analyst estimate of $-0.50. It beat the average revenue estimate of $200.03 million.

Quoting Management: “In 2012, we took advantage of every opportunity to position Radian for future success, including growing our volume of new, high-quality mortgage insurance business each quarter, reducing our portfolio of delinquent loans by 16%, maintaining a competitive risk-to-capital ratio and reducing our financial guaranty exposure by 51%,” said Chief Executive Officer S.A. Ibrahim. “Although our fourth quarter results were impacted by the continuing challenge of our legacy portfolio, our ability to write new, profitable business remains undiminished.”

Key Stats (on next page)…

Revenue decreased 13.34% from $260.79 million in the previous quarter. EPS decreased to $-1.34 in the quarter versus EPS of $0.11 in the previous quarter.

Looking Forward: Analysts have an improving outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from $-0.10 to $-0.01. For the current year, the average estimate is a loss of $2.64, which is better than the estimate of $-2.83 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)