Loews Q4 Loss Widens With CNA, Boardwalk Missing Estimates

(RTTNews) - Diversified holding company Loews Corp. (L) reported Monday a sharply wider loss for the fourth quarter, despite revenue growth, mainly reflecting higher impairment charges.

The company's 90 percent owned property and casualty insurance unit CNA Financial Corp. (CNA) turned to profit, but below Wall Street estimates, while its 53 percent owned unit Boardwalk Pipeline Partners, LP. (BWP) recorded sharply lower earnings per unit, also below analysts' view.

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

New York-based Loews posted a net loss of $198 million or $0.51 per share for the fourth quarter, sharply wider than $32 million or $0.08 per share in the prior-year quarter.

Before ceiling test and goodwill impairment charges, adjusted net income was $356 million, compared to $67 million in the year-ago quarter.

On average, four analysts polled by Thomson Reuters expected the company to report earnings of $0.72 per share for the quarter. Analysts' estimates typically exclude one-time items.

Loews' total revenues for the quarter grew to $3.89 billion from $3.71 billion in the same quarter.

The company attributed the decline in adjusted earnings primarily to higher earnings at CNA and increased investment income at the parent company amid improved performance of equities and limited partnership investments. These were partially offset by lower earnings at Diamond Offshore Drilling, Inc.

In the quarter, CNA Financial's net income grew to $221 million or $0.82 per share, compared to last year's net loss of $9 million or $0.03 per share. Net operating income was $213 million or $0.79 per share, and adjusted net operating income was $336 million or $1.24 per share. Analysts expected earnings of $0.88 per share. Quarterly revenues grew to $2.60 billion from last year's $2.44 billion.

Loews' share of CNA Financial's attributable net income was $192 million, compared to loss of $5 million a year ago.

CNA's earnings increased primarily from improved non-catastrophe current accident year underwriting results, higher investment income and lower catastrophe losses. These increases were partially offset mainly by lower level of favorable net prior year development. Net written premiums grew 5 percent year-over-year, driven by increases in CNA Specialty and Hardy.

Loews' share of Diamond Offshore's attributable net income declined to $44 million from $73 million a year earlier. Loews' said that the income slid primarily due to lower utilization including downtime for scheduled surveys and shipyard projects and a $27 million charge for an uncertain tax position related to Egyptian operations. Total revenues edged down to $728 million from $753 million in the previous year.

Boardwalk Pipeline's attributable net income was $19.5 million or $0.08 per unit, compared to last year's $90.1 million or $0.38 per unit. Loews' share of Boardwalk's attributable net income was down to $20 million from $31 million a year ago.

Boardwalk's operating revenues for the quarter declined 4 percent to $312.91 million from $325.7 million in the prior year. Analysts expected Boardwalk to report earnings of $0.31 per share and revenues of $320.28 million for the quarter.

Further, CNA Financial declared a special dividend of $1.00 per share and a more than 25 percent increase in quarterly dividend to $0.25 per share, payable on March 12 to stockholders of record on February 24, 2014.

Boardwalk also declared a quarterly cash distribution per common unit of $0.10, payable on February 27 to unitholders of record as of February 20, 2014.

For fiscal 2013, Loews reported net income of $595 million or $1.53 per share, higher than $568 million or $1.43 per share in prior year. Before ceiling test and goodwill impairment charges, adjusted net income was $1.28 billion, higher than $968 million in the year ago. Street was looking for full-year 2013 earnings of $2.84 per share.

Total revenues for the year grew to $15.03 billion from $14.50 billion in the previous year.

L closed Monday's regular trading session at $45.18, up $0.23 on a volume of 1.10 million shares. In the past 52-week period, the stock has been trading in a range of $42.09 to $49.03.