Bond insurer MBIA Inc. posted a quarterly loss of $2.4 billion as it took charges on billions of dollars of exposure to bonds linked to sub-prime mortgages.
But MBIA's beaten-down shares rose more than 4% as adjusted results beat expectations and the company said new business volumes appeared to be rising from the first quarter.
The charges announced Monday wiped out 40% of MBIA's net worth, but MBIA said most of the changes it recorded in the value of its exposure would not translate to actual payouts on insurance.
The first-quarter loss amounted to $13.03 per share, compared with a profit of $199 million, or $1.46, in the same quarter last year.
Excluding unrealized losses and other items, MBIA earned 16 cents per share, compared with analysts' average forecast of a 95-cent per share loss, according to Reuters Estimates.
First-quarter results include pretax unrealized losses on insured derivatives of $3.58 billion.
The company recognized a total of $1.34 billion of pretax impairments and loss reserves linked to insured securities with housing exposure.
Shares of MBIA rose 42 cents to close at $9.85.