Lorilland Inc MetLife Inc XL Capital Ltd CNA Financial Corp Quarterly Report

Although Lorilland Inc sales edged up from 1.05 million last year to $1.07 million this year, second quarterly report shows that their profit declined to $217 million from $239 million earlier year or declined on share $1.25 per share in the present compared with $1.37 per share last year.

Declined on their quarterly report are caused of two main reason, increasing on income sales and spin off from Loews Corporation. Income tax rate rose to 39.2 percent from 37.3 percent in year earlier.

MetLife Inc. reports second-quarter financial results on Tuesday after the market closes. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: Turbulent markets and the plummeting dollar pummeled MetLife’s investment portfolio in the first quarter, shrinking the New York’s insurer’s profit by 37 percent.

The company’s car and home insurance division’s profit also fell during the first quarter because of more claims from insured damage. During the recent quarter, MetLife made some market moves, with a subsidiary of the insurance giant saying it will buy the residential mortgage business of a unit of First Horizon National Corp. for an undisclosed amount.

MetLife also announced plans to sell its 52 percent stake in Reinsurance Group of America Inc. to MetLife shareholders. Both transactions are expected to close in the third quarter.

BY THE NUMBERS: Analysts, on average, expect MetLife to earn $1.51 per share during the second quarter on revenue of $13.89 billion, according to a survey by Thomson Financial.

ANALYST TAKE: Friedman, Billings, Ramsey & Co. analyst Randy Binner said uncertainties surrounding credit and market exposures remain in the insurance industry. Generally speaking, “Market sensitivities will again affect insurance operating results, although to a lesser extent than in the first quarter,” he wrote in a research note.

WHAT’S AHEAD: MetLife continues to push itself into the mortgage business. Its deal with First Horizon includes all of First Horizon’s origination business outside of the bank’s home state of Tennessee, servicing some $20 billion in mortgages. More than 230 retail and wholesale offices across the U.S. will be transferred.

XL Capital Ltd. shares tumbled in premarket trading Tuesday, a day after the insurer said it would raise new capital to rid itself of its exposure to former bond insurance subsidiary Security Capital Assurance Ltd.

The Bermuda-based insurer also said its profit tumbled 56 percent in the second quarter. XL Capital shares fell $1.77, or 9.6 percent, to $16.60 in premarket trading Tuesday. XL Capital will pay SCA about $1.78 billion in cash, issue 8 million shares to SCA and transfer its 46 percent stake in SCA to a trust.

The agreement provides support for the struggling bond insurer, and also eliminates XL Capital’s exposure under reinsurance agreements and guarantees with SCA subsidiaries. For the deal to be completed, XL Capital must raise $2.5 billion in new cash. That could prove costly for the insurer and dilutive for current shareholders.

“The transaction cost is extreme in that (fully diluted) sharecount will essentially double,” Citi Investment Research analyst Joshua Shanker, wrote in a research note. “Under current financials markets pressures, we believe that new buyers for XL’s stock were unlikely.”

Despite the high cost of raising new money during the current downturn in the credit markets, Stifel Nicolaus & Co. analyst Michael Paisan said XL Capital ridding itself of SCA liabilities is “a major step in the right direction,” Paisan wrote in a research note.

The move will eliminate about $65 billion of notional exposure “that had been overhang XL for some time,” Paisan said. XL Capital said it expects to record a charge between $1.4 billion and $1.5 billion during the third quarter related to the agreement with SCA. Paisan said he now expects XL Capital to lose 66 cents per share for the full year. He previously estimated the insurer would earn $6.71 per share in 2008.

Paisan expects XL Capital to lose $4.83 per share in the third quarter because of the charge. SCA has struggled over the past year as its ratings were downgraded by all three major ratings agencies amid deterioration in the credit markets. Since late 2007, ratings agencies have worried bond insurers might not have enough spare capital to handle a potential spike in claims. It is expected bond insurers will have to pay out additional claims in the coming years as bonds backed by troubled mortgages are likely to default.

CNA Financial Corp.’s profit fell nearly 17 percent in the second quarter, reflecting lower premiums and investment losses, the company said Monday.

The Chicago-based commercial insurer earned $181 million, or 67 cents per share in the April-June period. That compared with profit of $217 million, or 80 cents per share, a year earlier.

Operating income, which insurers emphasize because they say it better represents the health of an underwriter’s business, fell 21 percent to $250 million, or 93 cents per share. Analysts surveyed by Thomson Financial forecast profit of 93 cents per share.

CNA collected nearly $1.71 billion in premiums, a 4 percent decline from the second quarter last year. Of each premium dollar collected, CNA spent 97.7 cents administering claims, up 3 cents from the second quarter last year. Pretax net investment income fell $95 million from a year earlier, reflecting weaker results from trading and from limited partnerships. Like most insurers, CNA parks the premiums it collects in investments such as bonds.

Source: Forbes.Com

 

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