Genworth Financial Inc. plans to separate its money-losing long-term care business and stop selling traditional life and fixed annuities as part of a cost-cutting move.

The Richmond, Va., company unveiled the plans Thursday as it reported a narrower fourth-quarter loss. Genworth estimated it will take a $15 million pretax restructuring charge in the current quarter related to the actions.

Shares, which have lost nearly two-thirds of their value over the past 12 months, dropped 16% to $2.35 in after-hours trading.

The insurer focuses on sales of long-term care insurance, which helps pay for such things as nursing-home and home-based health care. Insurers have been moving away from them as medical costs rise and policyholders live longer, requiring higher payouts, and lower interest rates weighed on investment returns.

Genworth has been freeing up money to comply with tighter federal requirements for mortgage insurers that do business with Fannie Mae and Freddie Mac. Company officials said the insurer has met the Private Mortgage Insurer Eligibility Requirements and ended the year "with a prudent buffer."

Over all, Genworth reported a loss $292 million, or 44 cents a share, compared with a year-earlier loss of $760 million, or $1.81 a share. The latest results included more than $400 million in charges.

On an operating basis, Genworth reported a loss of 17 cents a share, compared with a loss of 83 cents a share a year earlier.

Operating results exclude investment gains or losses and other items that aren't considered recurring on a quarterly basis.

Revenue declined 3.1% to $2.16 billion.

Analysts surveyed by Thomson Reuters had projected an operating profit of 21 cents a share on $2.17 billion in revenue.

The long-term care business reported net operating income of $19 million, compared with a net operating loss of $10 million in the previous quarter and a net operating loss of $506 million in the year-ago period.

Write to Maria Armental at maria.armental@wsj.com

 

(END) Dow Jones Newswires

February 04, 2016 18:15 ET (23:15 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
Fannie Mae (QB) (USOTC:FNMA)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Fannie Mae (QB) Charts.
Fannie Mae (QB) (USOTC:FNMA)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Fannie Mae (QB) Charts.