Hartford expects 2Q net income to fall 68 pct

AP News
Posted: Jul 13, 2011 7:24 PM
Hartford expects 2Q net income to fall 68 pct

The Hartford Financial Services Group Inc. said Wednesday that it expects second-quarter profit to drop by about 68 percent from a year ago.

The insurer was hit hard by storm losses and increased litigation costs related to old asbestos lawsuits.

Hartford said in a preliminary report that it expects to post net income of $24 million, or 3 cents per share, for the second quarter. Results were impacted by catastrophe losses of $290 million and an increase in litigation reserves of $189 million to cover asbestos liabilities. Both are after-tax charges.

The company also will post a $74 million after-tax charge related to its previously announced disposition of Federal Trust Corp.

A year ago the company posted net income of $76 million, or 14 cents per share.

Shares fell 83 cents, or 3.2 percent, in after-market trading. They rose 4 cents to close at $15.60 in the regular session.

Core earnings, which exclude certain investment gains and losses, will be $12 million, or break-even on a per share basis.

Analysts surveyed by FactSet expected 75 cents per share.

Year-ago core earnings for the second quarter were $92 million, or 17 cents per diluted share.

"The Hartford's second quarter results were affected by severe U.S. catastrophe activity and other items unrelated to the fundamental performance of the underlying business," CEO Liam E. McGee said in a statement.

He said the company saw growth in the property and casualty insurance business and it will show a net unrealized gain of about $800 million in its investment portfolio.

Hartford will release its second-quarter results on Aug. 3 after the markets close.