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Loews (L) Q4 Earnings: What's in the Cards for the Stock?

Zacks Equity Research

Loews Corporation L is slated to report fourth-quarter 2018 results on Feb 11, before the market opens. In the last reported quarter, the company came up with a negative surprise of 10.20%.

Let’s see, how things are shaping up for this announcement.

Continued strong performances at CNA Financial CNA and Loews Hotels have likely aided Loews’ fourth-quarter performance. Loews Hotels has likely displayed better-than-expected results in the soon-to-be-reported quarter, primarily driven by a probable solid uptick at Loews Most Miami Beach and Coronado. A stable performance at Loews Hotel is likely to have boosted overall results in the fourth quarter.

Boardwalk Pipeline is likely to deliver better numbers on the back of growth-enhancing projects. Lower tax rate might have improved the results at both Boardwalk Pipeline and Loews Hotels.

CNA Financial’s efficient management of its long-term care book of business through prudent product claim handling is expected to mitigate risks and enable a rate increase.

However, the Multi line insurer might have witnessed an increase in both operating expenses and interest expense in the yet-to-be-reported quarter. Also, the company has likely experienced weak net operating revenues due to possible contract expirations, contract renewals at reduced rates, contract restructurings plus lower parking & lending and storage results.

Lower day rate, drop in contract drilling revenues and a decline in rigs working are likely to have weighed on the Diamond Offshore DO segment.

Additionally, Boardwalk Pipeline is expected to have incurred higher operating expenses due to depreciation of property taxes and employee-related costs.

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 53 cents, reflecting a considerable plunge of 36.1% from the year-ago quarter.

What Our Quantitative Model States

Our proven model does not conclusively show that Loews is likely to beat on earnings this to-be-reported period. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Earnings ESP: Loews has an Earnings ESP of 0.00%. This is because both the Zacks Consensus Estimate and the Most Accurate Estimate are pegged at 53 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Loews Corporation Price and EPS Surprise


Loews Corporation Price and EPS Surprise | Loews Corporation Quote

Zacks Rank: Loews carries a Zacks Rank #4 (Sell), which lowers the predictive power of ESP. We caution against Sell-rated stocks (4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stock to Consider

Another stock worth considering from the finance sector with the perfect mix of elements to outpace estimates this time around is as follows:

Ares Capital Corporation ARCC is set to report fourth-quarter earnings on Feb 12. The company has an Earnings ESP of +1.10% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

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