Loews Corporation L reported third-quarter 2015 operating earnings of 50 cents per share, which missed the Zacks Consensus Estimate of 59 cents. Earnings improved 6.4% year over year on higher earnings at Diamond Offshore Drilling, Inc. DO and Boardwalk Pipeline Partners, LP BWP.
Revenues
Loews’ total revenue declined 10% year over year to $3.2 billion in the quarter. Lower insurance premiums, net investment income and decreased contract drilling revenues can be held responsible for the downside.
Behind the Headlines
Total expenses decreased 11.4% year over year to $2.8 billion due to lower insurance claims & policyholders' benefits and lower contract drilling expenses.
CNA Financial’s CNA revenues decreased 7.2% over the prior-year period to $2.2 billion. It reported net income attributable to Loews Corp. of $190 million, up 15.8% year over year.
Boardwalk Pipeline Partners’ revenues increased 6.1% year over year to $296 million. Its reported net income attributable to Loews Corp. surged 125%year over year to $18 million. The improvement was fueled by new rates taking effect as a result of the Gulf South rate case and a franchise tax refund related to the settlement of prior tax periods. However, increased depreciation and higher costs were partial dampeners.
Loews Hotels’ revenues improved about 15.9% year over year to $146 million. Earnings attributable to Loews came at $2 million driven by higher income from Universal Orlando joint venture properties.
Diamond Offshore’s revenues declined 17.5% year over year to $608 million. Net income attributable to Loews increased 88% year over year to $47 million. The increase was attributable to absence impairment charge in the reported quarter.
Book value as of Sep 30, 2015 was $52.59 per share, up about 4.5% from $50.32 as of Sep 30, 2014.
Share Repurchase
During the third quarter of 2015, Loews spent $328 million on buying back 8.7 million shares. It bought another 3.3 million shares for $120 million subsequent to the third quarter through Oct 31.
Zacks Rank
Loews currently carries a Zacks Rank #5 (Strong Sell).
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