Diversified holding company Loews Corp. (L) reported Monday a loss for its fourth quarter, compared to prior year's profit, hurt mainly by Storm Sandy-related catastrophe losses at its 90 percent owned property and casualty insurance unit CNA Financial Corp. (CNA) and lower results at 50.4 percent-owned unit Diamond Offshore Drilling, Inc. (DO). Revenues, however, increased on good performance at most of its units.
Apart from CNA and Diamond Offshore, Loews holds 55 percent of Boardwalk Pipeline Partners, LP. (BWP), while HighMount Exploration & Production LLC and Loews Hotels are its wholly owned units.
For the fourth quarter, net loss attributable to Loews was $32 million or $0.08 per share, as against a profit of $271 million or $0.68 per share a year ago.
The latest quarter results included catastrophe losses of $171 million at CNA primarily related to Storm Sandy, and ceiling test impairment charge of $97 million at HighMount. Excluding these, net income was $236 million for the quarter.
On average, 2 analysts polled by Thomson Reuters expected earnings per share of $0.30 for the quarter. Analysts' estimates typically exclude one-time items.
Income before net investment losses and ceiling test impairment charges plummeted to $67 million, from $311 million a year ago. The decline was due to lower results at CNA and Diamond Offshore Drilling as well as decreased parent company investment income, despite higher earnings at Boardwalk Pipeline.
In the quarter, CNA recorded attributable loss of $5 million, compared to last year's $195 million profit due to higher catastrophe losses, partially offset by increased investment income on improved performance of limited partnership investments. CNA's combined ratio was 132.7 percent, compared to 95.1 percent last year.
Diamond Offshore's earnings decreased primarily due to the impairment charge related to the carrying value of three semisubmersible rigs and lower average daily revenue, partially offset by an overall increase in utilization and lower contract drilling expense.
Boardwalk Pipeline's earnings increased primarily due to the contributions from recent acquisitions and lower general and administrative expenses.
In the quarter, Loews' revenues totaled $3.71 billion, higher than last year's $3.48 billion. Insurance premiums grew to $1.78 billion from $1.66 billion a year ago.
CNA recorded a 6.6 percent increase in revenues to $2.44 billion. Diamond Offshore's revenues were almost flat, while Boardwalk Pipeline's revenues grew 8 percent and that of Loews Hotels climbed 45 percent. Meanwhile, revenues from HighMount declined 16 percent.
For fiscal 2012, Loews' attributable net income plunged to $568 million or $1.43 per share from prior year's $1.06 billion or $2.62 per share. Excluding charges, net income was $1.2 billion in 2012. Revenues grew to $14.55 billion from $14.13 billion in the previous year.
In a separate statement, CNA declared a quarterly dividend of $0.20 per share, payable March 7 to stockholders on record February 21.
On Friday, Loews shares grew 0.25 percent to close at $43.85, and CNA shares rose 0.25 percent to settled at $31.80.
by RTT Staff Writer
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