AMSTERDAM May 8 Dutch insurer Aegon
said first-quarter net profit fell nearly two thirds because of
hedging losses resulting from an unexpectedly strong rise in
U.S. stocks, particularly those in the S&P 500 index.
Aegon said it had insured itself against a fall in equity
markets and that the strong rise in stocks meant that its hedges
had an immediate negative impact on results under its accounting
rules. It said the loss will be offset over time by higher
earnings from higher stock values.
The hedging loss was $281 million in the first quarter,
pushing net profit down 61 percent to 204 million euros ($267
million), from 525 million euros in the same period last year.
The average forecast in a Reuters poll of five analysts was
for net profit of 329 million euros, with estimates ranging from
276 million euros to 401 million euros.
Aegon's quarterly underlying earnings before tax, which
assume a certain return on investments, rose 1 percent to 445
million euros, in line with analysts' forecasts.