Loews net falls on CNA pact
NEW YORK (Reuters) - Loews Corp LTR.N said on Monday third-quarter profit fell 12.5 percent as investment losses and a legal settlement at its commercial insurance unit offset better results in tobacco, drilling and oil pipelines.
Net income at New York-based Loews, a conglomerate run by the billionaire Tisch family, fell to $555.7 million from $635.1 million a year earlier.
Profit attributable to Loews shareholders fell 21 percent to $410 million, or 77 cents per share, from $517.2 million, or 94 cents.
Excluding losses from subprime mortgages and other investments, profit was 83 cents per share, according to Reuters Estimates, 7 cents below analysts' average forecast. Revenue rose 3 percent to $4.65 billion, with just over half coming from insurance.
Chief Executive James Tisch called the results "reasonably good." He said a mild hurricane season kept catastrophe losses to "very modest levels" despite a softening insurance market.
Loews' businesses include financial, tobacco, energy, hotel and watch-making companies.
Profit at Chicago-based CNA Financial Corp (CNA.N), the seventh-largest U.S. commercial insurer, fell 44 percent to $174 million, or 64 cents per share. Operating profit excluding investments fell 25 percent to $212 million, or 78 cents per share, 10 cents above the average forecast.
Results reflected a $108 million charge for a reinsurance settlement with John Hancock Life Insurance Co, a unit of Canada's Manulife Financial Corp (MFC.TO). They also included a $122 million write-down of investments, one-fourth of which related to subprime mortgages. Loews owns 89 percent of CNA.
CNA used 91.6 percent of premium income for claims and expenses, down from 94.5 percent a year earlier.
TOBACCO, DRILLING
Earnings at the Lorillard tobacco unit rose 15 percent to a record $233.6 million.
Profit attributable to shareholders of Carolina Group CG.N, a Lorillard tracking stock, was $145.7 million, or $1.34 per share, 6 cents above the average forecast.
Net sales rose 6 percent to $1.04 billion as higher cigarette prices and lower marketing costs offset a 1.6 percent drop in shipments. Lorillard brands include Newport menthol cigarettes, Kent and True.
Houston-based Diamond Offshore Drilling Inc (DO.N) said on October 25 that quarterly profit rose 25 percent to $205.5 million, or $1.48 per share, on higher demand for drilling rigs. Loews owns 51 percent of Diamond.
Profit rose 31 percent at Boardwalk Pipeline Partners LP (BWP.N), in which Loews has a 75 percent stake, and fell 20 percent at Loews Hotels. Loews is selling its Bulova Corp. watch-making unit to Japanese rival Citizen Holdings Co (7762.T) for 28.8 billion yen (US$251 million). Continued...
