Assured Guaranty forecasts 3rd-quarter loss

AP News
Posted: Nov 10, 2009 7:47 PM

Shares of Assured Guaranty Ltd. slid more than 6 percent in Tuesday aftermarket trading, after the bond insurer said acquisition and other costs will cause it to post a loss for the third quarter.

Assured Guaranty said it expects to report a quarterly loss of $35 million, or 22 cents per share, compared with a loss of $63.3 million, or 69 cents per share, a year ago. The 2009-quarter results include costs linked to the company's July acquisition of Dexia's insurance unit Financial Security Assurance Holdings Ltd.

Operating income is estimated at $70.1 million, or 44 cents per share. On average, analysts surveyed by Thomson Financial expect slightly higher operating profit of 46 cents per share.

Shares fell 51 cents, or 2.9 percent, to close earlier at $17.33. They fell $1.08, or 6.2 percent, to $16.40 in after-market trading after the guidance was released.

Assured Guaranty largely avoided the credit problems that have plagued rivals Ambac Financial Group Inc. and MBIA Inc. by avoiding insuring repackaged subprime mortgages. The company said third-quarter net earned premiums are expected to be about $330 million, up sharply from $85.5 million in the 2008 third quarter due to the FSAH acquisition. Total written premiums are expected to rise 10 percent to $124.2 million from $112.8 million.

The company expects to report a $133.3 million loss on financial guaranty contracts and about $142.2 million losses on credit derivative contracts.