Loews, CNA Financial 3Q Swing To Profit, Beat Analysts' Views
DOW JONES NEWSWIRES
Loews Corp. (L) and its CNA Financial Corp. (CNA) insurance unit swung to the
black in third quarter because of significantly lower investment losses and
improved investment income, as both companies handily beat analysts'
expectations.
Investment losses at CNA have hurt results, as they have at many insurers, but
the stock market has surged in recent months. And earlier this year, CNA said it
would expand to new sectors for a bigger geographic footprint. Loews holds a 90%
stake in CNA, its largest holding, and the insurer usually accounts for about
half its revenue.
Loews, a conglomerate led by New York's Tisch family, posted a profit of $468
million, or $1.08 a share, compared with a year-earlier loss of $137 million, or
31 cents per share. Analysts polled by Thomson Reuters expected earnings of 89
cents.
Revenue increased 26% to $3.74 billion.
CNA posted a profit of $263 million, or 86 cents a share, compared with a
year-earlier loss of $331 million, or $1.23 per share. Operating income, which
excludes investment gains and losses, was $1.23 from 31 cents. Analysts expected
92 cents.
Beyond investment losses, the previously year also included $168 million in
catastrophe losses, primarily from hurricanes, versus just $15 million in the
most recent period.
In the property-and-casualty segment, net written premiums fell 7.6% to $1.48
billion. The percentage of premiums paid in claims rose to 99.5% from 91.3%
including impacts related to catastrophes; excluding those, the percentage fell
to 101% from 107%.
Loews is also majority owner of Diamond Offshore Drilling Inc. (DO), which
last month posted a bigger-than-expected earnings jump due to lower drilling
expenses.
In September, a subsidiary of Willis Group Holdings Ltd. (WSH) agreed to pay
CNA $130 million to settle a dispute over the placement of personal accident
reinsurance, with the installments set to be complete by late December.
Loews and CNA shares closed at $33.10 and $21.77 Friday and weren't active
premarket. Both stocks risen in value this year, with Loews up 17% and CNA up
one-third.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; joan.solsman@
dowjones.com
(END) Dow Jones Newswires
11-02-090647ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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