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Loews Corporation (L - Free Report) reported second-quarter 2019 earnings of 82 cents per share, which beat the Zacks Consensus Estimate by 9.3% and increased 13.9% year over year.
The improvement stemmed from higher earnings contributed by CNA Financial (CNA - Free Report) and Boardwalk Pipeline, partially offset by lower parent company net investment income and decline in Diamond Offshore (DO - Free Report) earnings.
Behind the Headlines
Operating revenues of $3.6 billion increased 0.8% year over year. Higher insurance premiums and operating revenues and other aided the top line.
Total expenses increased nearly 2% year over year to $3.3 billion on higher insurance claims and policyholders' benefits as well as higher operating expenses.
Book value excluding accumulated other comprehensive income as of Jun 30, 2019 was $64.48 per share, up 3.7% from $62.16 as of Dec 31, 2018.
Loews Corporation Price, Consensus and EPS Surprise
CNA Financial’s revenues increased 2.2% from the prior-year quarter to $2.76 billion. Its reported net loss attributable to Loews Corp. was $249 million, up 3.8% year over year. The quarter witnessed improved results in its Life & Group business, partially offset by lower favorable net prior year reserve development in the Property & Casualty business.
Boardwalk Pipeline’s revenues increased 14.7% year over year to $327 million. Net income increased more than threefold to $53 million. The company witnessed higher earnings from transportation contracts mainly due to growth projects recently placed into service, partially offset by contract restructuring and expirations.
Loews Hotels’ revenues declined 7.5% year over year to $186 million. Income from Loews Corp. was $12 million, down 29.4% year over year. Earnings declined largely due to charges of $7 million related to pre-opening expenses incurred at hotels under development and the write-off of capitalized development costs related to a potential development site.
Diamond Offshore’s revenues plunged 17.3% year over year to $224 million. Net loss attributable to Loews Corp. was $52 million, wider than $37 million loss incurred in the year-earlier quarter. This downside was due to continuing challenging market conditions, higher contract drilling expense due to incremental amortization of certain previously deferred contract-related costs and drilling rig downtime.
Share Repurchase Update
The company bought back 3 million shares for $151 million in the second quarter. Subsequently, through Aug 2, 2019, it repurchased another 0.4 million shares for $23 million.
Prudential Financial’s (PRU - Free Report) second-quarter 2019 operating net income of $3.14 per share missed the Zacks Consensus Estimate by 2.5%. However, the bottom line increased 4.3% year over year.
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Loews (L) Q2 Earnings Surpass Estimates, Revenues Rise Y/Y
Loews Corporation (L - Free Report) reported second-quarter 2019 earnings of 82 cents per share, which beat the Zacks Consensus Estimate by 9.3% and increased 13.9% year over year.
The improvement stemmed from higher earnings contributed by CNA Financial (CNA - Free Report) and Boardwalk Pipeline, partially offset by lower parent company net investment income and decline in Diamond Offshore (DO - Free Report) earnings.
Behind the Headlines
Operating revenues of $3.6 billion increased 0.8% year over year. Higher insurance premiums and operating revenues and other aided the top line.
Total expenses increased nearly 2% year over year to $3.3 billion on higher insurance claims and policyholders' benefits as well as higher operating expenses.
Book value excluding accumulated other comprehensive income as of Jun 30, 2019 was $64.48 per share, up 3.7% from $62.16 as of Dec 31, 2018.
Loews Corporation Price, Consensus and EPS Surprise
Loews Corporation price-consensus-eps-surprise-chart | Loews Corporation Quote
Segment Details
CNA Financial’s revenues increased 2.2% from the prior-year quarter to $2.76 billion. Its reported net loss attributable to Loews Corp. was $249 million, up 3.8% year over year. The quarter witnessed improved results in its Life & Group business, partially offset by lower favorable net prior year reserve development in the Property & Casualty business.
Boardwalk Pipeline’s revenues increased 14.7% year over year to $327 million. Net income increased more than threefold to $53 million. The company witnessed higher earnings from transportation contracts mainly due to growth projects recently placed into service, partially offset by contract restructuring and expirations.
Loews Hotels’ revenues declined 7.5% year over year to $186 million. Income from Loews Corp. was $12 million, down 29.4% year over year. Earnings declined largely due to charges of $7 million related to pre-opening expenses incurred at hotels under development and the write-off of capitalized development costs related to a potential development site.
Diamond Offshore’s revenues plunged 17.3% year over year to $224 million. Net loss attributable to Loews Corp. was $52 million, wider than $37 million loss incurred in the year-earlier quarter. This downside was due to continuing challenging market conditions, higher contract drilling expense due to incremental amortization of certain previously deferred contract-related costs and drilling rig downtime.
Share Repurchase Update
The company bought back 3 million shares for $151 million in the second quarter. Subsequently, through Aug 2, 2019, it repurchased another 0.4 million shares for $23 million.
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 Another Insurer
Prudential Financial’s (PRU - Free Report) second-quarter 2019 operating net income of $3.14 per share missed the Zacks Consensus Estimate by 2.5%. However, the bottom line increased 4.3% year over year.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
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