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Loews Corp (L) Up 2.2% Since Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Loews Corporation (L - Free Report) . Shares have added about 2.2% in that time frame, underperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Loews Corporation reported fourth-quarter 2016 operating earnings of $0.79 per share, which beat the Zacks Consensus Estimate of $0.63 . The insurer had incurred loss of $0.58 per share in the year-ago quarter.
The quarter witnessed better performance by CNA Financial and Boardwalk Pipeline Partners’ and improved results from the parent company’s investment portfolio. However, lower earnings at Diamond Offshore and Boardwalk Pipeline were partial dampeners.
Revenues
Operating revenues of $3.3 billion declined 1.7% year over year. Lower insurance revenues and contract drilling revenues led to the downside.
2016 Highlight
Net income surged 160% year over year to $1.87 per share. Revenues of $13.1 billion dipped 2.3% from 2015.
Behind the Headlines
Total expenses decreased 23.7% year over year to $2.9 billion, largely due to lower contract drilling expenses and other operating expenses.
CNA Financial’s revenues increased 5.8% from the prior-year quarter to $2.4 billion. It reported net income attributable to Loews Corp. of $217 million, which compared favorably with a loss of $62 million in the year-ago quarter. 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’s revenues increased 7.9% year over year to $355 million. Its net income attributable to Loews Corp. increased 42% year over year to $27 million. The improvement was supported by revenues from new growth projects recently placed in service.
Loews Hotels’ revenues grew about 1.3% year over year to $154 million. Income attributable to Loews was $5 million, which compared favorably with a loss of $3 million in the year-ago quarter.
Diamond Offshore’s revenues declined 30.4% year over year to $390 million. Net income attributable to Loews was $36 million, which compared favorably with a loss of $122 million in the year-ago quarter.
As of Dec 31, 2016, book value was $53.89 per share, up about 4.3% from $51.67 as of Dec 31, 2015.
Share Repurchase
During the fourth quarter of 2016, Loews spent $19 million to buy back 0.4 million shares. This take 2016 tally to $134 million spent to buy back 3.4 million shares.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. While looking back an additional 30 days, we can see even more downward momentum. There have been two downward revisions in the last two months. In the past month, the consensus estimate has shifted 9.17% lower due to these changes.
At this time, Loews Corp's stock has an average Growth Score of 'C', a grade with the same score on the momentum front. However, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value investors than those looking for growth and momentum.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Loews Corp (L) Up 2.2% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Loews Corporation (L - Free Report) . Shares have added about 2.2% in that time frame, underperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Loews (L - Free Report) Q4 Earnings Beat Estimates, Revenues Decline Y/Y
Loews Corporation reported fourth-quarter 2016 operating earnings of $0.79 per share, which beat the Zacks Consensus Estimate of $0.63 . The insurer had incurred loss of $0.58 per share in the year-ago quarter.
The quarter witnessed better performance by CNA Financial and Boardwalk Pipeline Partners’ and improved results from the parent company’s investment portfolio. However, lower earnings at Diamond Offshore and Boardwalk Pipeline were partial dampeners.
Revenues
Operating revenues of $3.3 billion declined 1.7% year over year. Lower insurance revenues and contract drilling revenues led to the downside.
2016 Highlight
Net income surged 160% year over year to $1.87 per share. Revenues of $13.1 billion dipped 2.3% from 2015.
Behind the Headlines
Total expenses decreased 23.7% year over year to $2.9 billion, largely due to lower contract drilling expenses and other operating expenses.
CNA Financial’s revenues increased 5.8% from the prior-year quarter to $2.4 billion. It reported net income attributable to Loews Corp. of $217 million, which compared favorably with a loss of $62 million in the year-ago quarter. 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’s revenues increased 7.9% year over year to $355 million. Its net income attributable to Loews Corp. increased 42% year over year to $27 million. The improvement was supported by revenues from new growth projects recently placed in service.
Loews Hotels’ revenues grew about 1.3% year over year to $154 million. Income attributable to Loews was $5 million, which compared favorably with a loss of $3 million in the year-ago quarter.
Diamond Offshore’s revenues declined 30.4% year over year to $390 million. Net income attributable to Loews was $36 million, which compared favorably with a loss of $122 million in the year-ago quarter.
As of Dec 31, 2016, book value was $53.89 per share, up about 4.3% from $51.67 as of Dec 31, 2015.
Share Repurchase
During the fourth quarter of 2016, Loews spent $19 million to buy back 0.4 million shares. This take 2016 tally to $134 million spent to buy back 3.4 million shares.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. While looking back an additional 30 days, we can see even more downward momentum. There have been two downward revisions in the last two months. In the past month, the consensus estimate has shifted 9.17% lower due to these changes.
Loews Corporation Price and Consensus
Loews Corporation Price and Consensus | Loews Corporation Quote
VGM Scores
At this time, Loews Corp's stock has an average Growth Score of 'C', a grade with the same score on the momentum front. However, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value investors than those looking for growth and momentum.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.