Genworth Financial Inc. shares plummeted Thursday after the financial services and insurance company posted a large and unexpected third-quarter loss.
The company, based in Richmond, Virginia, reported an adjusted loss of 64 cents per share versus earnings of 28 cents per share a year earlier. The loss surprised investors as analysts had been anticipating earnings of 16 cents per share.
Genworth shares sank $5.07, or 36 percent to $9 by midday Thursday.
The company said late Wednesday that the loss is due to an increase in reserves for its long-term care claims and goodwill impairments tied to its life and long-term care insurance business. Like many companies, Genworth conducts a goodwill impairment analysis annually to assess the value of intangible assets. Based on a smaller overall market size, higher expected claim costs and other matters, Genworth determined it needed to adjust this accounting measure.
Raymond James analyst Steven Schrwartz said in a research note that it was not a good quarter for the company's life insurance division. He said the increase in reserves was much higher than he had though possible.
The company's shares closed at $14.07 Wednesday, down roughly 9 percent since the beginning of the year. Thursday's drop may offset any gains made in the past two years, putting the stock price at levels it hasn't seen since early 2013.