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Loews (L) Q3 Earnings Beat Estimates, Revenues Rise Y/Y

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Loews Corporation (L - Free Report) reported third-quarter 2016 operating earnings of 89 cents per share, which beat the Zacks Consensus Estimate of 69 cents. Earnings surged 53% year over year.

The quarter witnessed better performance at CNA Financial (CNA - Free Report) and improved results from the parent company investment portfolio. However, lower earnings at Diamond Offshore (DO - Free Report) and Boardwalk Pipeline were partial dampeners.

Including investment gains, net income of 97 cents per share surged 94% year over year.


Operating revenues of $3.2 billion inched up 0.7% year over year. Higher insurance revenues and improved net investment income drove the upside.

Behind the Headlines

Total expenses decreased 3.2% year over year to $2.7 billion due to lower contract drilling expenses.

CNA Financial’s revenues increased 8.4% from the prior-year quarter to $2.4 billion. It reported net income attributable to Loews Corp. of $281 million, up 47.9% year over year. The improvement was attributable to higher net investment income, which in turn was driven by limited partnership investments as well as realized investment gains.

Boardwalk Pipeline Partners’ revenues inched up 3.4% year over year to $306 million. Its net income attributable to Loews Corp. decreased 22% year over year to $14 million. The decline mainly stemmed from a non-recurring franchise tax refund received in the last-year third quarter. Excluding this, Boardwalk Pipeline's earnings increased on the back of revenues from new growth projects and an improvement in storage and parking and lending revenues, partially offset by a rise in interest expenses.

Loews Hotels’ revenues grew about 10.3% year over year to $161 million. Income attributable to Loews was $3 million, up 50% year over year. Results were benefitted by higher earnings from joint venture properties.

Diamond Offshore’s revenues declined 42% year over year to $350 million. Net income attributable to Loews was $7 million, much lower than $47 million in the year-ago quarter.  The decline stemmed from lower number of rigs operating as well as considerable unscheduled rig downtime. However, lower depreciation expenses due to asset impairment charges incurred in prior periods limited the downside.

Book value as of Sep 30, 2016 was $53.79 per share, up about 2% from $52.72 as of Dec 31, 2015.

Share Repurchase

During the third quarter of 2016, Loews spent $17 million to buy back 0.4 million shares.

LOEWS CORP Price, Consensus and EPS Surprise


LOEWS CORP Price, Consensus and EPS Surprise | LOEWS CORP Quote

Zacks Rank

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

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