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Loews (L) Q4 Earnings Beat Estimates, Revenues Rise Y/Y

Zacks Equity Research

Loews Corporation L reported fourth-quarter 2019 earnings of 73 cents per share, beating the Zacks Consensus Estimate by 1.4%. The bottom line came against the year-ago loss of 53 cents per share.

This upside was largely driven by better net investment income at CNA Financial CNA and the parent company. However, the same was partly offset by poor performances at Boardwalk Pipelines and Loews Hotels & Co.

Loews Corporation Price, Consensus and EPS Surprise

Loews Corporation Price, Consensus and EPS Surprise

Loews Corporation price-consensus-eps-surprise-chart | Loews Corporation Quote

Behind the Headlines

Operating revenues of $3.8 billion increased 17.9% year over year. Higher insurance premiums, net investment income and investment gains aided the top line.

Total expenses inched up 2.3% year over year to $3.6 billion on higher operating expenses.

Book value excluding accumulated other comprehensive income as of Dec 31, 2019 was $65.94 per share, up 6.1% from $62.16 as of Dec 31, 2018.
Segmental Details

CNA Financial’s revenues rose 15.6% from the prior-year quarter to $2.8 billion. Its reported net income attributable to Loews Corp. was $244 million against the year-ago quarter's loss of $75 million. Earnings improved on the back of higher net investment income, net investment gains and higher current underwriting income, driven mainly by lower catastrophe losses for the Property & Casualty (P&C) business.

Boardwalk Pipeline’s revenues improved 1.5% year over year to $331 million. Net income declined 12.7% year over year to $48 million due to a favorable tax adjustment in 2018. The company witnessed higher earnings from better firm transportation revenues, stemming from growth projects recently placed into service.

Loews Hotels’ revenues decreased 6.1% year over year to $170 million. Net loss from Loews Hotels & Co was $59 million against the year-ago quarterly gain of $7 million. Performance suffered due to impairment charges related to the carrying value of hotel properties.

Diamond Offshore’s revenues grew 18.4% year over year to $277 million. Net loss attributable to Loews Corp. was $38 million, narrower than $58 million loss incurred in the year-earlier quarter. This upside was due to higher contract drilling revenues as a result of a contractual margin commitment from a customer.

Share Repurchase Update

The company bought back 3 shares for $417 million in the fourth quarter.  For the full year, it repurchased stock worth $1.1 billion. As of Dec 31, 2019, the company had 291 million shares remaining under its plan.

Full-Year Update

The company reported annual net income of $3.07 per share, up 54.2% year over year. Revenues for the period totaled $14.9 billion, up 6.1% year over year.

Zacks Rank

Loews currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Among other players from the insurance industry having reported fourth-quarter earnings so far, the bottom-line results of Brown & Brown, Inc. BRO and RLI Corp. RLI beat the respective Zacks Consensus Estimate.

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