Diversified holding company Loews Corp. (L: Quote) reported Monday a profit for the second quarter that plunged from last year, reflecting significant charges and revenue decline. Earnings per share for the quarter came in lower than analysts' expectations.
The New York-based company reported net income of $56 million or $0.14 per share for the second quarter, sharply down from $250 million or $0.61 per share in the prior-year quarter.
On average, three analysts polled by Thomson Reuters expected the company to report earnings of $0.73 per share for the second quarter. Analysts' estimates typically exclude special items.
Results for the latest quarter include an after tax non-cash ceiling test impairment charges of $142 million related to the carrying value of its natural gas and oil properties at HighMount Exploration & Production LLC, reflecting declines in natural gas and NGL prices.
Excluding the charge, Loews' adjusted net income would have been $198 million in the latest quarter, still down from $250 million in the year-ago quarter.
The drop in profit was primarily attributable to lower earnings at Diamond Offshore Drilling, Inc. and decreased performance of equity and limited partnership investments at the parent company. These were partially offset by higher earnings at CNA Financial Corp., and Boardwalk Pipeline Partners, LP.
Loews owns a stake of 50.4 percent in Diamond Offshore and 90 percent in CNA Financial Corp. (CNA). HighMount and Loews Hotels are its wholly owned subsidiaries. Boardwalk Pipeline Partners, LP (BWP) is its 62 percent owned subsidiary.
Total revenues for the quarter decreased to $3.39 billion from $3.54 billion in the same quarter last year.
Of this, insurance premium grew to $1.67 billion from $1.60 billion, while net investment income decreased $386 million from $519 million in the prior-year quarter. Contract drilling revenues decreased to $726 million from $870 million, while other revenues grew to $588 million from $539 million last year.
Total expenses for the quarter grew to $3.17 billion from $2.99 billion in the year-ago quarter.
Among Loews' principal subsidiaries, CNA Financial, and Boardwalk Pipeline posted year-over-year growth in earnings and revenues, while Diamond Offshore and HighMount reported a decline in earnings and revenues. Loews Hotels' revenue grew, while earnings remained flat with last year.
As at June 30, 2012, book value per share increased to $49.31 from $46.63 as at June 30, 2011.
L closed Friday's regular trading session at $41.70, up $0.56 on a volume of 0.86 million shares. In the past 52-week period, the stock has been trading in a range of $32.90 to $41.80.
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by RTT Staff Writer
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