Loews Corp. (L, Financial) released its fourth-quarter 2020 earnings before the opening bell on Feb.8.
The New York-based conglomerate posted a fourth-quarter net profit of $397 million, translating to earnings per share of $1.45. That compares with net income of $217 million, or $0.73 per share, reported in the same period a year earlier. Adjusted earnings stood at $1.60 per share. Revenue dropped to $3.71 billion from $3.88 billion in the prior-year quarter.
Reflecting on 2020, Loews' CEO James Tisch commented:
"CNA delivered excellent property and casualty underwriting results in 2020, even while faced with a once-in-a-century pandemic, record catastrophe losses, and historically low interest rates. CNA's strong performance underscores the company's continued focus on disciplined and profitable underwriting. Rates increased 11% for the full year and new business flow was solid, resulting in strong premium growth. The underlying combined ratio of 93.1% for the full year represents an improvement of more than one full point over 2019."
Segment performance
Income attributable to the CNA Financial division increased on a year-over-year basis to $346 million, reflecting higher property and casualty underwriting income resulting from a rise in premiums and underlying combined ratio. In addition, positive net investment income coupled with higher investment gain helped the segment's overall result. This was partially offset by higher net catastrophe losses, which includes Coronavirus-related expenses.
Likewise, earnings in the Boardwalk Pipeline business rose to $83 million, up from $48 million, as the company received post-tax net proceeds of $26 million due to contract cancellations resulting from customer bankruptcy.
In the Hotels segment, the company posted a loss of $68 million, which is worse than the loss of $59 million reported last year. Occupancy rates remained significantly lower as compared with the same quarter in 2019. During the quarter, the company incurred $6 million pretax impairment charges, which was partially negated by $7 million after tax gains on sales of hotel property in 2020.
In the Corporate segment, the company attributed the net loss to an investment loss of $957 million as a result of a reduction in the book value of interest in Diamond Offshore Drilling (DOFSQ, Financial). The company's Diamond Offshore division did not provide sales and income details.
Share repurchases
For the quarter ended Dec. 31, 2020, the company repurchased 5.9 million shares at an average cost of $244 million. The company said that it would, at intervals, repurchase its shares as well as its subsidiaries' outstanding common stock in the open market or otherwise.
Guidance
The company did not provide earnings and revenue guidance.
Disclosure: I do not hold any positions in the stocks mentioned.
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