Tower Group International Ltd.'s shares slumped Thursday after the insurance company warned it could record loss reserve hits of $60 million to $110 million for the second quarter.Shares tumbled 19% to $17.54 in recent trading.
The latest announcement comes after the insurer said Wednesday it was postponing its second-quarter earnings release, originally scheduled for Thursday, because additional time was needed to review matters relating to the estimate of its loss reserves and its allocation of goodwill and certain tax accounts. Tower Group had said it couldn't predict the length of time of its review.
The company said Thursday it expects to announce its results for the second quarter within 30 days.
At a reserve adjustment of $60 million, Tower Group said it would record operating earnings of 15 cents to 20 cents a share, including a deferred tax valuation allowance of between 35 cents and 40 cents a share.
At a charge of $110 million, its operating loss would be between 80 cents and 85 cents a share, including a deferred tax valuation allowance of between 18 cents and 23 cents.
The estimates exclude any non-cash goodwill impairment effects.
Analysts polled by Thomson Reuters were looking for a profit of 53 cents a share. A year earlier, Tower Group reported a per-share operating loss of 39 cents a share.
Also, the company said it might record goodwill write-downs in the period in the wake of its merger with Canopius Bermuda and changing how goodwill is allocated.