Mortgage insurer PMI Group Inc. reported its biggest ever quarterly loss, primarily due to losses from its investment in bond insurer FGIC Corp, and cut its quarterly dividend by over 70 percent.
PMI, which had rescheduled its quarterly results, said fourth-quarter net loss was $1.0 billion, or $12.51 a share, compared with net income of $100.5 million, or $1.19 a share, in the year ago period.
Analysts expected the company to post a loss of $3.37 a share.
PMI also slashed its quarterly dividend by more than 70 percent to $0.0125 per share from $0.0525 a share earlier.
Loss from its investment in FGIC was $776.1 million, while that from the U.S. mortgage insurance business was $236.0 million.
The company, which partly owns bond insurer FGIC, had earlier warned of a substantial quarterly loss in its financial guaranty business.
PMI, and its larger rivals, MGIC Investment Corp MTG.N. and Radian Group have been severely hit as borrowers missed payments and investor interest in high risk credit instruments curtailed.
The PMI Group is a provider of credit enhancement products that promote homeownership and the provision of services essential to the building of strong communities. It offers first loss, mezzanine and risk remote financial insurance across the credit spectrum and worldwide. The Company operates through four segments: U.S. Mortgage Insurance Operations, International Operations, Financial Guaranty, and Corporate and other.
The company was founded in 1972 by Preston Martin and is headquartered in Walnut Creek, California, with operations in Asia, Australia, Canada, Europe, New Zealand, and the United States.