What happened
Genworth Financial (GNW -1.17%) saw its stock price plummet on Thursday. At 2:40 p.m. ET, it was down about 14.4% but had been down as much as 17.6% during the trading day. As of 2:40 p.m. ET, the stock was trading at $4.66 per share, down 11.8% year to date.
The market was down across the board on Friday. The S&P 500 was down 31 points (-0.8%), the Dow Jones Industrial Average had fallen 350 points (-1.1%), and the Nasdaq Composite was off 53 points (-0.5%) at 2:40 p.m. ET.
So what
Genworth Financial is an insurance company that provides long-term care, life, and mortgage insurance -- the latter through its subsidiary Enact. Its stock price plummeted after it released first-quarter earnings on Wednesday afternoon after the closing bell.
The company missed revenue and earnings estimates. Revenue was down 2% to $1.85 billion, while net income fell to $62 million from $191 million in the first quarter of 2022. Adjusted operating income fell 30% to $84 million, or $0.17 per share, year over year.
The Enact business, which generated $143 million in adjusted operating income, was up 6% year over year. These gains were offset by losses in long-term care and life insurance.
Long-term care saw a net loss of $37 million from a gain of $27 million a year ago, while life insurance and annuities saw a net loss of $4 million in the quarter. Genworth also got a boost with $787 million in net investment income in the quarter, up from $764 million a year ago.
Now what
Genworth is a penny stock that should be viewed cautiously. It's dirt cheap, with a price-to-earnings ratio of just under 5 and a price-to-book ratio of 0.29. But the long-term care business has struggled, and its earnings history has been spotty in recent years.
The stock is cheap, but without consistent earnings power, there are much better insurance stocks out there right now to consider.
