MGIC Investment Crushes Estimates

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MGIC Investment (NYS: MTG) reported earnings on Jan. 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), MGIC Investment crushed expectations on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded significantly and earnings per share contracted.

Margins increased across the board.

Revenue details
MGIC Investment recorded revenue of $447 million. The four analysts polled by S&P Capital IQ predicted a top line of $325 million. Sales were 21% higher than the prior-year quarter's $348 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at -$1.19. The five earnings estimates compiled by S&P Capital IQ predicted -$0.90 per share on the same basis. GAAP EPS were -$0.67 for Q4 compared to -$0.93 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was -16.1%, 1,620 basis points better than the prior-year quarter. Operating margin was -16.1%, 1,620 basis points better than the prior-year quarter. Net margin was -29.5%, 1,970 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $320 million. On the bottom line, the average EPS estimate is -$0.17.

Next year's average estimate for revenue is $1.3 billion. The average EPS estimate is -$1.08.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 307 members out of 498 rating the stock outperform, and 191 members rating it underperform. Among 174 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 92 give MGIC Investment a green thumbs-up, and 82 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on MGIC Investment is outperform, with an average price target of $5.33.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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