Conseco Swings To 3Q Profit On Higher Sales, Smaller Losses
DOW JONES NEWSWIRES
Conseco Inc. (CNO) swung to a third-quarter profit--its third in a row after a
string of losses--as rallying stock markets cut investment losses from a year
earlier.
Shares fell 2.6% to $5.25 in after-hours trading although the struggling
insurer's earnings topped Wall Street's expectations. The stock has soared from
an all-time low of 26 cents in March, but has fallen 22% from its 52-week high
last month.
Conseco recently took a big step toward shoring up its balance sheet after it,
and others in the industry, were battered in the past year by billions of
dollars in investment losses. Hedge-fund manager Paulson & Co. agreed to invest
$77.9 million in its stock and warrants and to buy up to $200 million of the $
293 million of convertible notes it is selling. Conseco also plans to sell up to
$200 million in shares in a public offering.
For the latest quarter, Conseco reported a profit of $15.4 million, or 8 cents
a share, compared with a year-earlier loss of $183.3 million, or 99 cents a
share. Operating earnings, which exclude investment gains and losses, fell to 29
cents from 31 cents.
Revenue grew 9.5% to $1.12 billion amid the improved investment results,
though insurance policy income slid 6.1% and investment income ticked down 1.9%.
Analysts' estimates were for earnings of 22 cents on revenue of $1.12 billion,
according to a poll by Thomson Reuters.
Conseco sells health, life and other insurance products, primarily to lower-
and middle-income clients. Profit at its Bankers Life segment, which distributes
insurance through career Bankers insurance agents, climbed 26%, while Conseco's
smaller insurance group, which works through independent insurance agents,
posted a 37% drop in earnings. Profit at Colonial Penn--which distributes
insurance through television, Internet and direct mail--grew 14%.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357; Kathy.Shwiff@dowjones.com
(END) Dow Jones Newswires
11-04-091733ET
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