Radian Group shares fall on 1Q results, downgrade BusinessWeek
Shares of Radian Group Inc. tumbled on Tuesday after the mortgage insurer posted a far wider first-quarter loss than analysts had expected, prompting Standard & Poor's Equity Research to cut its rating of the stock.
The shares were also pressured by Radian's announcement of a $550 million common stock offering, which would dilute the value of existing shares. The underwriters can purchase up to an additional $82.5 million in stock to cover excess demand.
The Philadelphia-based company on Tuesday reported a loss of $310.4 million, or $3.77 per share, for the three months ended March 31. That was up from a loss of $217.4 million, or $2.69 per share, in the year-ago period.
Analysts surveyed by Thomson Reuters had expected a loss of about 90 cents per share, on average.
Standard & Poor's Equity Research, which had forecast a per-share loss of 41 cents, cut its rating of the stock to "Sell" from "Hold," and widened its full-year loss estimate to $3.45 per share, up from its prior expectations for a per-share loss of $2.83. S&P also cut its 12-month price target for the stock to $9 down from an earlier target of $11.
