Loews Profit Hurt by Diamond Offshore Earnings

Posted by Joseph Keefe August 4, 2014

Hotel, energy and financial services conglomerate Loews Corp reported a 57 percent drop in quarterly profit due to lower earnings from Diamond Offshore Drilling Inc, one of the world's top five offshore rig contractors.

Net income attributable to Loews fell to $116 million, or 30 cents per share, in the second quarter ended June 30 from $269 million, or 69 cents per share, a year earlier.

Loews, controlled by New York's wealthy Tisch family, said revenue fell to $3.59 billion from $3.62 billion.

Diamond Offshore's quarterly profit fell 52 percent in the latest quarter and the company warned its North Sea customers were reluctant to sign contracts for rigs for the winter months.

Separately, insurer CNA Financial Corp, which is the largest subsidiary of Loews, said net income rose to $267 million, or 98 cents per share, in the quarter from $194 million, or 72 cents per share, a year earlier.

Over the years, Loews has trimmed CNA's operations - which previously included life insurance, personal automobile insurance, health insurance and reinsurance businesses - with the latest major sale announced in February.

Loews is also considering the sale of its wholly owned natural gas subsidiary HighMount Exploration & Production LLC due to sustained low natural gas prices and grim price outlook for the fuel caused by a shale boom.

Up to Friday's close of $42.25, Loews' shares have lost about 5 percent since April, when the company last reported results. CNA's shares lost about 7 percent in the same period and closed at $38.06 on Friday.