Ambac +10% after 'emphatic' beat

• Q3 operating EPS of $3.23 cruised past Street estimates for $0.68 and his own estimates of $0.84, says BTIG's Mark Palmer. There was also a 7.3% Q/Q increase in adjusted book value per share to $32.12.
• A big part of the beat was a 23% Q/Q decline in operating expenses as the company lowered headcount. The company also cut its risk book by 8.4%, and its adversely classified credits by 3.4%.
• Sounds good, but Palmer remains Neutral on the stock, waiting for a catalyst in the form of either a settlement of rep and warranty claims with Bank of America, or the announcement of a deal facilitating the exit of the segregated account from rehabilitation.
• AMBC +10.5% to $19.62.
• Ambac Earnings Center