Genworth's stock slips on slashed profit target for '08

The Richmond, Va., insurer's profit shriveled to $116 million from $324 million in the first quarter. The company's profit was affected in two areas: mortgage insurance and the investment portfolio.

The mortgage insurance division, which writes policies promising to repay mortgage lenders when borrowers default, lost $36 million. Genworth has a lot of policies in states where the housing market has hit hardest, like Florida and California.

The division paid $84 million in claims, more than double the first quarter last year. Of each premium dollar collected, Genworth spent $1.42 administering claims.

The company booked $128 million in losses on investments, many of which were tied to unreliable mortgage credit.

Genworth cuts its profit target for the year by 40 cents per share, to a range of $2.25 to $2.65 per share.

"Lower guidance reflects continued deterioration in U.S. mortgage insurance as well as pressure in other business segments from challenging market conditions and business trends," Banc of America Securities analyst Tamara K. Kravec wrote in a client note.

Shares of Genworth Financial lost $1.453, or 6.5 percent, to $21.97.