) reported second quarter 2012 adjusted net income of 47 cents per
share, substantially missing the Zacks Consensus Estimate of 72
cents. Earnings also declined 19% year over year from 57 cents per
share. Adjusted net income stood at $186 million, down 22%
year over year.
Including non-cash ceiling test impairment charges of $142 million
and net investment gains of $12 million, Loews reported net income
of $56 million or 14 cents per share, comparing unfavorably with
$250 million or 61 cents per share in the year-ago quarter. The
prior-year quarter includes net investment gains of $12
Lower earnings at
) and soft results from equity and limited partnership investments
at the parent company weighed on the results. Higher earnings at
CNA Financial Corporation
) and Boardwalk Pipeline Partners, LP were the positives.
CNA FINL CORP (CNA): Free Stock Analysis Report
DIAMOND OFFSHOR (DO): Free Stock Analysis
LOEWS CORP (L): Free Stock Analysis Report
TRAVELERS COS (TRV): Free Stock Analysis Report
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Total revenue at Loews in the quarter was $3.39 billion, down 4.3%
from $3.52 billion in the prior-year quarter. Lower net investment
income and contract drilling revenues led to the overall decline in
Total expense in the quarter increased 6% year over year to $3.17
billion. The increase was mainly due to higher contract drilling
expenses and non-cash ceiling test impairment charges.
Loews Hotels posted the highest growth in revenue in the quarter,
which improved 5.6% year over year to $94 million. Net income
remained flat year over year at $6 million.
CNA Financial's revenue increased 1.9% over the prior-year period
to $2.2 billion in the quarter under review. CNA Financial reported
net income attributable to Loews Corp. of $138 million, improving
37% year over year. The improvement largely stemmed from lower
catastrophe losses and improved non-catastrophe current accident
year underwriting results. However, lower net investment income due
to weak limited partnership results were was a partial offset.
The Boardwalk Pipeline's revenue increased 5.3% to $277 million
from the prior-year level. Earnings improved almost 5 times to $25
million in the quarter, fueled by higher contribution from
Boardwalk HP Storage Company and the prior-year impact of an
impairment charge related to steel pipe materials.
Diamond Offshore's revenue decreased 11.1% year over year to $793
million. Earnings dipped 25% year over year to $94 million, largely
due to lower rig utilization, a decrease in average dayrate, and an
increase in contract drilling expenses. However, gain from the sale
of five jack-up rigs in the quarter was a partial offset.
High Mount's revenue declined 30% year over year to $69 million in
the quarter under review. Earnings plummeted 80% year over
year to $3 million in the second quarter.
Book value as of June 30, 2012, was $49.31 per share, up 5.7% from
$46.63 as of June 30, 2011.
During the second quarter, Loews spent $15 million to buyback 1.3
The Travelers Companies
), reported earnings of $1.26 per share in the second quarter of
2012, lagging the Zacks Consensus Estimate of $1.38 per share.
Results rebounded from the loss of 88 cents incurred in the
Travelers missed the expectation due to catastrophe losses. Cat
loss incurred by the company totaled $357 million or 90 per share,
arising from wind and hail storms in several regions of the United
Total revenue in the quarter under review was $6.4 billion, flat
with the year-ago quarter, driven by the increase in premiums
earned, partially offset by decrease in net investment income.
Revenue surpassed the Zacks Consensus Estimate of $6.3 billion.
We maintain our Outperform recommendation on Loews over the long
term. The quantitative Zacks #1 Rank (short-tem Strong Buy rating)
for the company indicates slight boost on the shares over the near