Diversified holding company Loews Corp. (L), Monday, reported a profit for the fourth quarter of fiscal 2009, compared with a loss last year. The turnaround reflected higher limited partnership results as well as investment gains at CNA.
Loews principal subsidiaries are insurer CNA Financial Corp. (CNA), a 90% owned subsidiary; drilling rigs operator Diamond Offshore Drilling, Inc. (DO), a 50.4% owned subsidiary; HighMount Exploration & Production LLC, a wholly owned subsidiary; Boardwalk Pipeline Partners, LP, a 72% owned subsidiary; and Loews Hotels, a wholly-owned subsidiary.
Fourth-quarter net income attributable to Loews was $403 million or $0.94 per share, compared with a net loss attributable to Loews of $958 million or $2.20 per share last year.
On average, three analysts polled by Thomson Reuters expected the company to report earnings of $0.95 per share. Analysts' estimates typically exclude special items.
For the preceding third quarter, Loews posted net income attributable to Loews common stock of $468 million or $1.08 per share.
New York-based Loews, run by the billionaire Tisch family, stated that the current-year quarter's results primarily reflect improved net investment income and net investment gains at CNA Financial Corp., compared to a loss from continuing operations in the prior year. Income from continuing operations included net investment gains of $46 million, compared with net investment losses of $282 million in the previous year.
Net investment gains in the fourth quarter of 2009 were driven by a $217 million realized investment gain from the sale of CNA's common stock holdings in Verisk Analytics, Inc. and lower other-than-temporary impairment, or OTTI, losses recognized in CNA's available-for-sale portfolio. The OTTI losses were primarily driven by the impact of difficult economic conditions on residential and commercial mortgage-backed securities and by credit issues in the financial sector.
The prior-year quarter's results included an after-tax non-cash impairment charge of $440 million related to the carrying value of HighMount Exploration & Production LLC's natural gas and oil properties, an after tax non-cash goodwill impairment charge of $314 million related to HighMount, and OTTI losses related to CNA's investment portfolio.
Total quarterly revenues grew to $3.82 billion from $2.74 billion in the same quarter last year.
Insurance premiums declined to $1.69 billion from $1.77 billion a year ago. Net investment income was $591 million, in comparison with $50 million in the fourth quarter of 2008. Investment gains totaled $75 million, versus investment losses of $484 million in the prior-year quarter. Contract drilling revenues declined to $873 million from $887 million in the fourth quarter of 2008. The company also reported other revenues of $597 million, up from $525 million in the previous year.
Among subsidiaries, CNA Financial earlier today reported fourth-quarter net income of $246 million or $0.81 per common share, compared to a net loss of $336 million or $1.31 per share last year. CNA's total revenues increased to $2.398 billion from $1.537 billion in the prior year.
Diamond Offshore has reported net income of $276.1 million or $1.98 per share, down from $293.3 million or $2.11 per share in the same period a year earlier. Revenue declined to $890.8 million from $903.2 million last year.
HighMount revenue was $154 million, compared with $180 million in the prior-year quarter. Boardwalk Pipeline generated revenues of $279 million, higher than last year's $207 million. Loews Hotels recorded fourth-quarter revenues of $71 million, compared with $88 million in the same quarter of fiscal 2008.
For fiscal 2009, the company reported net income attributable to Loews Corp. of $564 million or $1.30 share, compared with $4.53 billion or $9.05 share in the previous year. Full-year revenues rose to $14.12 billion from $13.25 billion a year ago.
Amongst others in the sector, American Financial Group Inc. (AFG) is slated to announce its fourth-quarter results on February 9. Wall Street analysts are of the view that the company will earn $0.98 per share in the quarter.
Another rival, property and casualty insurance provider Travelers Companies Inc. (TRV) on Tuesday reported a 60% surge in profit for the fourth quarter from last year, bolstered by a 49% increase in net investment income. The St. Paul, Minnesota-based company's net income rose to $1.29 billion or $2.36 per share from $801 million or $1.35 per share in the prior-year quarter. Total revenue advanced 11% to $6.46 billion from $5.81 billion in the previous year.
L closed Friday's trading at $35.37, up $0.04, on a volume of 3.097 million shares.
For comments and feedback: editorial@rttnews.com