NEW YORK -- Shares of Genworth Financial Inc. tumbled Wednesday, a day after the insurance company said it would delay the initial public offering for its Australian mortgage insurance business until early next year.
THE SPARK: The Richmond, Va.-based company said the IPO had previously been targeted for the second quarter of this year. It attributed the delay to its recent performance in Australia, where losses have risen as a result of a jump in foreclosures.
THE BIG PICTURE: Genworth said lenders in Australia have increased foreclosure activity, especially in coastal areas of Queensland that are reeling from natural catastrophes and regional economic slowdowns.
As a result, Genworth said it expects its Australian mortgage unit to post a "modest" first-quarter loss. But Genworth said the Australian unit remains sound and that it's continuing with the IPO regulatory review process.
THE SHARES: Down $1.69, or 22 percent, to $6.01 in extremely heavy afternoon trading, after falling as low as $5.96 earlier in the day.
Over the past 52 weeks, the company's shares have traded between $4.80 and $12.55. Since the beginning of this year, Genworth shares have risen about 18 percent.