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.