On a GAAP basis, the company posted EPS of $0.62 in the quarter, compared with $0.92 in the same period a year ago. GAAP earnings include a noncash ceiling test impairment charge of $92 million at Loew’s wholly-owned HighMount Exploration & Production. In the year-ago quarter, a similar noncash impairment charge reduced net income by $28 million. The ceiling test assesses the carrying value of the company’s natural gas and oil properties.
Loews was hit hard in the fourth quarter by the effect of Hurricane Sandy on its CNA insurance group. In the first quarter, the firm attributed the drop in net income to “reduced parent company investment income as a result of lower performance for the trading portfolio.” In other words, picking losers. Investment income in the first quarter of 2012 totaled $76 million compared to just $7 million in the first quarter of 2013.
Loews did not offer guidance in its news release, but the consensus analysts’ estimate for the second quarter calls for EPS of $0.82. For the year, the estimates call for EPS of $3.41 on revenues of $13.29 billion.
Shares are inactive in this morning’s premarket trading, and closed down about 1.3% on Friday, at $44.44 in a 52-week range of $38.14 to $45.20. The 52-week high was set last week. The consensus target price for the shares was $46.00 before today’s report.