Loews Q3 Profit Climbs With CNA Above View, While Boardwalk Misses Estimates

(RTTNews) - Diversified holding company Loews Corp. (L) reported Monday a higher profit in its third quarter, mainly reflecting lower impairment charges, despite nearly flat revenues.

The company's 90 percent owned property and casualty insurance unit CNA Financial Corp. (CNA) generated higher profit, above Wall Street estimates, while its 55 percent owned unit Boardwalk Pipeline Partners, LP. (BWP) recorded lower earnings per unit, below analysts' view.

Apart from CNA and Boardwalk, Loews holds more than half of Diamond Offshore Drilling, Inc. (DO), while HighMount Exploration & Production LLC and Loews Hotels are its wholly owned units.

In the third quarter, Loews posted net income attributable to the company of $282 million or $0.73 per share, compared to $177 million or $0.45 per share, a year before.

The latest results included non-cash ceiling test impairment charges of $42 million, compared to $166 million last year. Excluding these non-cash impairment charges, adjusted net income for the recent quarter totaled $324 million, compared to $343 million in the prior year. Before net investment gains and impairment charges, net income was $322 million.

On average, 2 analysts polled by Thomson Reuters expected earnings per share of $0.77 for the quarter. Analysts' estimates typically exclude one-time items.

Loews recorded total revenues of $3.704 billion in 2013, compared to $3.715 billion a year earlier.

The company attributed the decline in adjusted earnings to lower earnings at Diamond Offshore Drilling and lower investment income at the parent company. These decreases were partially offset by higher earnings at CNA Financial.

In the quarter, CNA Financial's net income grew to $272 million or $1.01 per share from last year's $221 million or $0.82 per share. Net operating income was $269 million or $1 per share. Analysts expected earnings of $0.76 per share.

Loews' share of CNA Financial's attributable net income was $244 million, higher than $195 million a year ago. CNA's earnings increased primarily from improved non-catastrophe current accident year underwriting results and higher favorable net prior year development. These increases were partially offset mainly by higher catastrophe losses. Net written premiums grew 2 percent year over year, driven by increases in CNA Specialty and Hardy.

Loews' share of Diamond Offshore's attributable net income plunged to $44 million from $83 million a year earlier. Loews' said that the earnings slid chiefly due to lower utilization and $35 million of lost revenue and bad debt write-offs relating to termination of rig contracts due to payment defaults by two customers. Total revenues dropped to $706.17 million from $729.14 million in the previous year.

Boardwalk Pipeline's attributable net income was $62.3 million or $0.21 per unit, compared to last year's $58.2 million or $0.26 per unit. Loews' share of Boardwalk's attributable net income edged down to $19 million from $20 million a year ago.

Boardwalk's operating revenues for the quarter were $275.5 million, higher than $270.6 million in the prior year. Analysts expected Boardwalk to report earnings of $0.26 per share and revenues of $294.95 million for the quarter.

Further, CNA Financial declared a quarterly dividend of $0.20 per share, payable November 26 to stockholders of record on November 12.

Boardwalk also declared a quarterly cash distribution per common unit of $0.5325 payable on November 14, to unitholders of record as of November 7.

In pre-market activity, Loews shares gained $0.59 or 1.21 percent and traded at $49.40, while Boardwalk lost $0.74 or 2.37 percent, and traded at $30.51.