CNA-parent Loews Corp. posts loss
Loews Corp., the holding company run by New York's Tisch family, reported its second consecutive quarterly loss as the price of its natural gas reserves fell and investment losses widened at its commercial insurance unit.
The fourth-quarter loss from continuing operations was $958 million, or $2.20 a share, compared with profit of $295 million, or 56 cents, in the same period a year earlier, the New York- based company said today in a statement. Highmount, its natural gas exploration unit, had $754 million in after-tax costs tied to the falling commodity prices.
Loews also owns 90 percent of CNA Financial Corp., the Chicago-based property and casualty insurer, and a majority of Diamond Offshore Drilling Inc., the second-largest deepwater oil driller by market value. CNA earlier today reported a net loss of $336 million in the eighth straight quarter in which the wrote down the value of its portfolio, which includes holdings of financial firms and securities tied to the U.S. housing market
"Our fourth quarter and full-year results reflect the impact of the severe and prolonged turmoil in the financial markets on our investment income and realized investment results," said Thomas Motamed, CNA's chief executive officer, in a separate statement.
The quarterly results are the first announced under Motamed, the former Chubb Corp. executive hired by CNA to replace Stephen Lilienthal. CNA has declined about 61 percent in the past year on the New York Stock Exchange. Loews slipped 44 percent.
Bond Losses
The insurer said the fourth-quarter investment losses of $314 million were "primarily in the corporate and other taxable bonds and asset-backed bond sectors."
Loews agreed in October to inject $1.25 billion into CNA by buying preferred shares after the insurer posted a $331 million third-quarter loss. CNA halted its dividend to common shareholders. The insurer typically accounts for more than half Loews' revenue.
Diamond Offshore's fourth-quarter profit rose 78 percent to $293.5 million because the driller gained from contracts signed when commodity prices were higher, the company said last week.
Diamond's fourth-quarter day rates for jack-ups, so called because of the retractable legs that extend to the sea floor, were $121,000, up from $115,000 a year earlier. Rates for its intermediate semi-submersible rigs were $284,000, up from $218,000. Diamond Offshore reported results last week.
The fourth quarter net loss of $958 million compares to a profit of $512 million a year earlier, a figure that includes results from a cigarette business, which has since been sold. For the full year, Loews earned $4.53 billion, compared with $2.49 billion in 2007.
Laurence Tisch, father of Loews Chief Executive Officer Jim Tisch, and Preston Robert Tisch, his uncle, started Loews when they bought a New Jersey hotel in 1946. The family owns about 27 percent of Loews, according to Bloomberg data. .