Bond insurer MBIA reports smaller 4th-qtr loss of $242 M as mortgage security losses continue

MBIA narrows 4Q loss to $242 million

ARMONK, N.Y. — MBIA Inc. said Monday that its loss narrowed in the fourth quarter, although losses from mortgage-related securities continued to hammer the bond insurer.

For the final three months of 2009, MBIA lost $242 million, or $1.16 per share. That’s less than one-fourth its loss of $1.2 billion, or $5.21 per share, a year earlier.

But it’s worse than Wall Street expected. On average, analysts polled by Thomson Reuters expected MBIA to report a loss of $1.11 per share.

Its shares nonetheless rose 11 cents to $4.91 in after-hours trading, after slipping 2 cents during the regular session.

MBIA’s quarterly revenue was $652.7 million, compared with a loss of $1.59 billion last year. The fourth quarter of 2008 included a $1.67 billion loss on insured derivatives.

In the latest quarter, MBIA said it recorded $661 million in losses related to its insurance of second-lien mortgage loan securitizations. The company recorded another $199.6 million in pretax realized losses and other settlements on insured derivatives.

Premiums earned during the quarter totaled $158.5 million, down from $227 million in 2008.

Net investment income sank to $130.5 million from $264.5 million in the same quarter of 2008. Fees and reimbursements were $90.2 million, down from $10.6 million last year.

For the year, the company earned $623.2 million, or $2.99 per share. That compares with a loss of $2.7 billion, or $12.11 per share in 2008.