Diversified holding company Loews Corp. (L) on Monday reported a turnaround to profit in fourth quarter despite lower revenues. However, income from continuing operations declined 13 percent from last year, reflecting lower investment income.
The company's 90 percent owned property and casualty insurance unit, CNA Financial Corp. (CNA), reported a profit that declined from last year on a one-time charge and lower net investment income.
Loews' 53 percent-owned unit, Boardwalk Pipeline Partners, LP. (BWP), recorded higher earnings in the fourth quarter, reflecting a year-ago charge.
Apart from CNA and Boardwalk, Loews holds just more than half of Diamond Offshore Drilling, Inc. (DO), while Loews Hotels & Resorts is its wholly-owned unit.
New York-based Loews' fourth-quarter net income was $208 million or $0.55 per share, compared to net loss of $198 million or $0.51 per share in the prior-year quarter.
However, income from continuing operations for the quarter declined to $215 million or $0.57 per share from $248 million or $0.64 per share in the year-ago quarter.
On average, three analysts polled by Thomson Reuters expected the company to report earnings of $0.53 per share for the quarter. Analysts' estimates typically exclude one-time items.
The company attributed the decline in income from continuing operations primarily due to a decline in parent company investment income, primarily attributable to limited partnership and equity based investments.
Loews' total revenues for the quarter declined 6 percent to $3.53 billion from $3.77 billion in the same quarter last year.
In the quarter, CNA Financial's net income decreased to $198 million or $0.73 per share from $221 million or $0.82 per share in the year-ago period.
CNA's earnings for the latest quarter were impacted by a $49 million charge related to a lump-sum pension plan settlement. Results were also unfavorably impacted by lower net investment income, driven by limited partnerships, which produced a rate of return of 2.2 percent as compared with 5.3 percent in the prior-year quarter.
CNA's net operating income for the quarter was $205 million or $0.76 per share, compared to $206 million or $0.76 per share last year. Analysts expected earnings of $0.80 per share for the quarter.
Quarterly revenues declined 7 percent to $2.38 billion from last year's $2.56 billion, while Street was looking for revenues of $2.29 billion.
Loews' share of CNA Financial's attributable net income was $186 million, down slightly from $187 million a year ago.
Loews' share of Diamond Offshore's attributable net income rose to $47 million from $44 million in the year-ago period.
Diamond Offshore earnings improved primarily due to the absence of a prior-year tax provision of $27 million for an uncertain tax position related to its Egyptian operations. This was almost wholly offset by lower rig utilization and increased depreciation expense.
Total Diamond Offshore revenues for the quarter declined 7 percent to $677 million from $728 million in the previous-year quarter.
Boardwalk's net income attributable to controlling interests rose to $36.8 million or $0.15 per unit from $19.5 million or $0.08 per unit last year.
Loews' share of Boardwalk's attributable net income rose to $35 million from $15 million in the year-ago period. Boardwalk's higher earnings for the quarter stemmed from the impact in 2013 of a goodwill charge of $16 million.
Excluding this charge, earnings decreased primarily due to higher maintenance costs and expenses related to the Evangeline ethylene pipeline system acquired in October 2014.
Boardwalk's revenues for the quarter declined 2 percent to $305 million from $311 million in the prior year.
Analysts expected Boardwalk to report earnings of $0.18 per share for the quarter on revenues of $288.12 million.
For fiscal 2014, Loews' net income was $591 million or $1.55 per share, compared to $595 million or $1.53 per share in the prior year. Income from continuing operations for the year was $962 million or $2.52 per share, down from $1.15 billion or $2.95 per share in the previous year.
Total revenues for the year decreased 2 percent to $14.33 billion from $14.61 billion last year.
Street expected the company to earn $2.55 per share for the year.
Further, CNA Financial declared a special dividend of $2.00 per share and a quarterly dividend of $0.25 per share, payable March 12 to stockholders of record on February 23, 2015.
Boardwalk declared a quarterly cash distribution per common unit of $0.10, payable on February 26 to unitholders on record February 19, 2015.
Diamond Offshore declared a regular quarterly dividend of $0.125 per share, payable March 2, 2015 to shareholders of record on February 20, 2015. Additionally, the company's board has chosen not to declare a special dividend.
L closed Friday's trading at $40.74, up $0.01 or 0.02 percent on a volume of 947,027 shares. In Monday's pre-market, the stock is up $1.09 or 2.67 percent to $41.80.
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