Genworth shares sink after 3Q loss, dividend cut

Genworth shares fell $2, or 42.6 percent, to $2.70 in afternoon trading. Earlier in the session, shares hit an all-time low of $2.64. Genworth shares began trading in 2004.

For the quarter ended Sept. 30, Genworth lost $258 million, or 60 cents per share, after a profit of $339 million, or 76 cents per share, during the same quarter last year.

Analysts surveyed by Thomson Reuters, on average, forecast earnings of 55 cents per share for the quarter.

Citi Investment Research analyst Colin Devine reiterated his "Hold" rating on the stock, despite the worse-than-expected results. Devine did cut his price target to $4 from $12 amid greater uncertainty in the company's financial future.

"Fundamentally, we believe Genworth faces many operating and financial issues related to both the impact of the deteriorating credit environment on its U.S. and international mortgage insurance units as well as from poor underwriting at its long-term care and life insurance operations," Devine wrote in a research note.

Genworth's third-quarter loss included $478 million in net investment losses as it was hit hard by the ongoing turmoil in the credit and mortgage markets. Total revenue fell 25 percent to $2.17 billion.

The company suspended its dividend and share repurchase program in an effort to preserve cash amid the downturn and losses. Genworth also said it would consider asset sales.

The company could be forced to undertake a capital raise before the end of the year, but it could be costly and highly dilutive to current shareholders, Devine said.

Genworth withdrew its most recent financial outlook, which it released with its second-quarter results. Genworth had previously estimated earnings ranging from $2.25 per share to $2.65 per share.