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Nov-04-2009Ambac reports $2.2 bln quarterly profit, shares jump(topic overview)
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- NEW YORK, Nov 4 (Reuters) - Bond insurer Ambac Financial Group posted a quarterly profit of more than $2 billion after accounting gains related to its weakening credit quality, reversing a year-earlier loss and sending its shares up as much as 46 percent. (More...)
- Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. (More...)
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NEW YORK, Nov 4 (Reuters) - Bond insurer Ambac Financial Group posted a quarterly profit of more than $2 billion after accounting gains related to its weakening credit quality, reversing a year-earlier loss and sending its shares up as much as 46 percent. [1] The bond insurer's shares rose as high as $1.62, up 46 percent, in morning trading on the New York Stock Exchange. Ambac, like its larger rival MBIA Inc (MBI.N: Quote, Profile, Research ), has struggled to write new business since losing its top-notch credit rating last year.[2]
With the acquisition of Centex in August, Pulte received an increased market share in the first-time homebuyer market. This market for the Company has received a government stimulus with the temporary federal tax credit. "Beyond the impact of the merger, Pulte's Q3 results reflect a homebuilding industry that continues its transition toward more stable market conditions as lower prices and historically low mortgage rates are helping to support homebuyer demand," said Richard J. Dugas, Jr., Chairman, President and CEO of Pulte Homes. Pulte Homes raised its merger synergy and savings target by 25% to $440 million. New home orders for the Company, including those made through Centex operations grew by 35 percent to 4.048 homes, ahead of the same quarter last year which saw 3,008 in sales.[3] Pulte Homes Inc. (NYSE: PHM ) reported a loss of $361 million in the third quarter, however the company increased sales by more than a third with the acquisition of Centex Corp.[3]
The New York-based company is still battling losses on complex debt securities it insured. Such losses, and loss expenses, totaled $459 million in the third quarter, down from $607 million a year earlier.[1]
Bond insurer Ambac Financial Group has announced a 2009 third quarter net income of $2.19bn compared with third quarter net loss of $2.43m in 2008. This year's third-quarter results reflect unrealised mark-to-market. To continue reading this article please subscribe or take a free trial to Reactions.[4] Ambac Financial Group Inc. (ABK) swung to a third-quarter profit thanks to large mark-to-market gains on credit derivatives, which had cost the bond insurer billions in losses a year earlier.[5]
Third-quarter profit totaled $2.19 billion, or $7.58 a share, compared with a loss of $2.4 billion, or $8.45 a share, a year earlier, Ambac ( ABK - news - people ) reported on Wednesday.[1]
Total revenue also missed the market estimate for Pulte, with third-quarter numbers at $1.09 billion, below the $1.17 billion consensus and down from $1.5 billion in last year's third quarter.[3] Total revenues were $2.69 billion, compared to negative revenue of $2.32 billion in the prior year quarter.[6]
Revenue for the quarter was $45.31 million, which compares to the estimate of $33 million.[3] Revenue for the quarter was $284.4 million. Raises its FY09 operating margin guidance to 17.5-18%.[3]
Ambac said net premiums earned in the third quarter dropped 16 percent to $238.4 million.[2]
The quarter-end backlog was 8,838 homes, valued at $2.2 billion. Pulte said as of September 30, 2009 it was out of compliance with the tangible net worth covenant under its credit facility, but it is in talks with banks to negotiate a permanent amendment by December 15, 2009.[3] The value of the company's debt relative to Treasuries fell during the quarter, triggering $2.13 billion in gains from credit protection it sold to customers on complex mortgage securities.[2]
The company reported a third-quarter loss of $1.15 per share, far from the analyst consensus of a 64 cent loss per share.[3] Shares of MBIA, due to report third-quarter results next week, were up about 15 percent to $4.72.[1]
Shares of Pulte Homes are priced at $9.23 before the market opens today.[3]
Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. [2] In June the bond insurer delayed plans to launch a municipal bond arm called Everspan after having difficulty raising money from outside investors to fund the unit.[1]
SOURCES
1. UPDATE 3-Ambac profit boosted by credit derivative gains - Forbes.com
2. UPDATE 3-Ambac profit boosted by credit derivative gains | Reuters
3. StreetInsider.com
4. Ambac posts 22bn profit in Q3 | 04112009 | Reactions - Global Insurance
5. Ambac Swings To Black On Derivatives; Shares Surge - WSJ.com
6. RTTNews - Breaking News, financial breaking News, Positive EPS Surprises, Stock research .
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