MBIA (NYSE:MBI) is expected to report Q2 earnings before market open Friday, Aug. 8, with a conference call scheduled for 9:00 am ET.
Analysts are looking for EPS of ($1.37) on revenue of $388.78M.
Only one analyst has made a revenue estimate for the company. The consensus range for EPS is ($2.76) to (6c), according to First Call. It has been a difficult summer for MBIA. The company has already announced that it would lose $300M from selling $4B in investment assets from its ALM portfolio in Q2. In late June, Moody's downgraded the insurance financial strength ratings of the company to A2 from Aaa. As a result of the downgrade by Moody's and earlier downgrades by other ratings agencies, MBIA may have to come up with $2.9B in order to meet some contracts and put up another $4.5B in collateral, the Wall Street Journal reported. Meanwhile, just 24% of all state and local debt sold in 1H08 was insured, down from 49% in 1H07, Bloomberg reported, citing data compiled by Thompson Reuters.
Investors may want to try to determine during MBIA's conference call whether its municipal bond insurance business is drying up. In a related matter, the city of Los Angeles recently sued MBIA and four of its competitors for allegedly conspiring to create a credit-rating system that caused local governments to unnecessarily buy bond insurance.