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

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Loews Corporation 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 - Free Report) 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 - Free Report) and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate.

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