Storms, Asbestos Claims Prompt Lowered Profit Forecast From The Hartford
HARTFORD, Conn. (AP) _ The Hartford Financial Services Group
said Wednesday that it expects second-quarter profit to drop by
about 68 percent from a year ago.
The insurer was hit hard by storm losses and increased
litigation costs related to old asbestos lawsuits.
Hartford said in a preliminary report that it expects to post
net income of $24 million, or 3 cents per share, for the second
quarter. Results were impacted by catastrophe losses of $290
million and an increase in litigation reserves of $189 million to
cover asbestos liabilities. Both are after-tax charges.
The company also will post a $74 million after-tax charge
related to its previously announced disposition of Federal Trust
A year ago the company posted net income of $76 million, or 14
cents per share.
Shares fell 70 cents, or 2.7 percent, in after-market trading.
They rose 4 cents to close at $15.60 in the regular session.
Core earnings, which exclude certain investment gains and
losses, will be $12 million, or break-even on a per share basis.
Analysts surveyed by FactSet expected 75 cents per share.
Year-ago core earnings for the second quarter were $92 million,
or 17 cents per diluted share.
“The Hartford’s second quarter results were affected by severe
U.S. catastrophe activity and other items unrelated to the
fundamental performance of the underlying business,” CEO Liam E.
McGee said in a statement.
He said the company saw growth in the property and casualty
insurance business and it will show a net unrealized gain of about
$800 million in its investment portfolio.
Hartford will release its second-quarter results on Aug. 3 after
the markets close.
(Copyright 2011 by The Associated Press. All Rights Reserved.)