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Old Republic posts $127 million loss
Bloomberg News
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Published: 1/22/2009 2:52 PM

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Old Republic International Corp., the Chicago based mortgage guarantor and title insurer, posted a loss of $126.5 million and predicted "pressures" on results into 2010 amid the housing recession. The stock fell 14 percent in New York trading.

The fourth-quarter loss of 54 cents a share compares with profit of $20.2 million, or 9 cents, a year earlier, the insurer said today in a statement. The operating loss of 31 cents a share, which excludes some investment returns, missed the 24- cent average deficit estimated by four analysts surveyed by Bloomberg.

Chief Executive Officer Aldo Zucaro saw opportunity last year in the biggest property slump since the Great Depression and increased Old Republic's reliance on U.S. homebuyers. That proved to be a mistake so far as the value of holdings in mortgage guarantors MGIC Investment Corp. and PMI Group Inc. and title insurer LandAmerica Financial Inc. dwindled.

"Substantially all the reduced performance stemmed from continued weakness in the company's mortgage guaranty and title insurance lines," Old Republic said in the statement, "It is likely that these factors will exert additional earnings pressures throughout 2009 and, at the least, a part of 2010."

The insurer dropped $1.73 to $10.38 at 10:15 a.m. in New York Stock Exchange composite trading. Old Republic has slipped about 23 percent in the past year.

Both title and mortgage insurance businesses posted their second consecutive annual operating losses. Realized investment losses in the fourth quarter were $63.5 million, bringing the total for the year to $486.4 million. The 2008 net loss was $558.3 million.