UPDATE 1-RenaissanceRe swings to profit, issues warning
(Adds operating results, CEO statement)
NEW YORK, Feb 6 (Reuters) - RenaissanceRe Holdings Ltd. (RNR.N) on Tuesday swung to a fourth quarter profit from a year ago loss due to the absence of hurricanes, but warned that revenue could fall in 2007.
"We are seeing signs of softening in several of our markets," said Neill Currie, RenaissanceRe's chief executive. "Overall we expect our top line (revenue) to be down slightly in 2007 versus 2006."
"They had fabulous results, but it's a give and take away situation," said Chuck Hamilton, an analyst with FTN Midwest Research.
The Bermuda reinsurer said earnings for the latest quarter were $201.1 million or $2.78 a share, compared with a year-ago fourth quarter loss of $210.4 million or $2.97 when it paid $314 million in claims to victims of Florida's Hurricane Wilma.
Operating earnings were $198.6 million or $2.74 a share, compared with an operating loss of $206.9 million or $2.92 a share in the year earlier quarter. Operating earnings excluded investment gains and losses.
Analysts had expected the reinsurer to earn $2.38 a share in the latest quarter, according to a poll of Reuters Estimates.
While the reinsurer exceeded analysts' estimates by a wide margin, Currie also said he sees premiums in its catastrophe business, excluding certain joint ventures, down about 5 percent in the coming year.
Currie cited a recent Florida law, which effectively puts the state in competition with reinsurers like his company. Reinsurers provide backup coverage to regular property insurers such as Allstate Corp. (ALL.N) in case of major catastrophes.
RenaissanceRe closed at $54.70 on the New York Stock Exchange, up 50 cents. In the past 12 months, its shares have risen more than 21 percent, compared to a 12.5 percent gain in the Standard & Poor's insurance index .GSPINSC.
Earlier on Thursday RenaissanceRe agreed to pay $15 million to settle charges by the U.S. Securities and Exchange Commission that it created a sham transaction to defer earnings.
The charges dated from transactions that took place between 2001 and 2003. The company had announced a tentative settlement in July.
