UPDATE 2-Improving credit trends bolster Radian’s numbers

* Sees Q4 claims at $420.0 mln vs Q3 $494.2 mln

* Posts narrower-than-expected Q3 loss, excluding gain

* Q3 EPS $0.84 vs loss/shr $0.86 yr ago

* Provisions for mortgage losses down 8 pct

* Shares up 15 pct; rivals MGIC, PMI rally
(Recasts; adds details from conference call, share movement)

Nov 2 (BestGrowthStock) – Mortgage insurer Radian Group (RDN.N: )
joined bigger rival MGIC Investment in posting strong results,
indicating a slow improvement in the industry that is flushing
out bad loans and tightening underwriting standards.

The No. 2 U.S. mortgage insurer expects fourth-quarter paid
claims to fall sequentially. For 2011, it sees claims paid at
$1.7 billion.

“Potential delays caused by the recent foreclosure
moratoriums add further uncertainty to (the $1.7 billion)
number,” Chief Financial Officer Robert Quint said on a call
with analysts.

Mortgage insurers pay claims in case of a default or
foreclosure and activity around foreclosure and claim payment
has been a big concern for the sector.

Radian shares rose as much as 15 percent in morning trade.
Shares of MGIC (MTG.N: ) and PMI Group (PMI.N: ) gained about 6
percent following Radian’s results.

Philadelphia, Pennsylvania-based Radian swung to a profit
after four straight quarters of losses, helped by an investment
gain and improving delinquency trends.

Net income for July-September was $112.2 million, or 84
cents a share, compared with a loss of $70.5 million, or 86
cents a share, a year earlier.

The results included a gain of $1.12 per share from the
change in fair value of derivatives.

Excluding the gain, the company lost 28 cents a share,
versus expectations of a loss of 66 cents a share, according to
Thomson Reuters I/B/E/S.

“The signs of credit trend stabilization continued for our
businesses, including the third straight quarter of declining
mortgage insurance delinquencies, despite the challenge of an
uncertain economy,” Chief Executive S.A. Ibrahim said in a
statement.

Primary and pool delinquent loans decreased by 5.8 percent
and 2 percent, sequentially.

Provision for mortgage insurance loss fell to $347.8
million from $376.5 million. Total expenses fell 8 percent to
$416.6 million. Radian expects to reduce operating expenses by
about 10 percent in 2011.

The company’s shares have lost nearly 60 percent since
touching a year-high in April.
(Reporting by Sweta Singh in Bangalore; Editing by
Unnikrishnan Nair and Vinu Pilakkott)

UPDATE 2-Improving credit trends bolster Radian’s numbers