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Loews, CNA Financial Boost Net Income in 2Q

Source: AP

Posted on 03 Aug 2010

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Loews Corp., the conglomerate run by the Tisch family, said Monday that investment gains helped lift its second-quarter profit by 8 percent.

The New York company, whose interests include energy, hotels and insurance, said it earned $366 million, or 87 cents per share, in the three months ended June 30.

Loews said it gained $1 million on investment sales in the latest quarter, compared to a loss of $178 million in the year-ago period.

However, total revenue for the quarter fell to $3.49 billion from $3.53 billion in the same period last year. The drop was the result of lower insurance premiums, income from existing investments and contract drilling revenues.

CNA Financial Corp., the company's commercial insurance unit, also said investment gains helped more than triple its net income in the second quarter.

CNA earned $283 million, or 96 cents per share, compared with $105 million, or 27 cents per share, last year.

Not including one-time gains, the company earned 91 cents per share. That still beat analyst estimates, who do not factor in one-time items. On average, analysts polled by Thomson Reuters expected a net income of 69 cents per share.

CNA Financial shares advanced 75 cents to $28.81.

In the latest quarter, the company booked a $13 million gain on investment sales, reversing last year's $199 million loss.

Net operating income fell to $269 million, however, from $305 million a year ago, as a result of lower income from existing investments and lower accident underwriting results.

Net premiums for property and casualty operations fell to $1.49 billion from $1.6 billion.

The company also noted that it agreed to cede its asbestos and environmental pollution liabilities to National Indemnity Co., a unit of Berkshire Hathaway Inc. The closing of the transaction is expected to occur in the third quarter, at which time CNA expects to recognize an after-tax loss of about $375 million.