WASHINGTON (dpa-AFX) - Hartford Financial Services Group Inc. (HIG), said Monday it slipped to a loss in the first quarter, after the insurer incurred charges related to its Japan annuities hedging program as well as debt-related expenses.
Excluding items, core earnings for the quarter grew seven percent from a year ago, on growth in its Property and Casualty, as also at Group Benefits and Mutual Funds businesses.
Following the results, Hartford stock initially slid 2.5 percent in after-hours trade on the New York Stock Exchange, but later pulled back. The stock is now down 0.22%.
Results for the quarter were dented by a $541 million after-tax unlock charge mainly due to the expanded hedging of the international variable annuity block, and a $138 million after-tax loss on extinguishment of debt.
The Hartford, Connecticut-based company posted a quarterly net loss of $241 million or $0.58 per share, compared to net income of $96 million or $0.18 per share last year.
Excluding items, core earnings for the quarter were $456 million or $0.92 per share, compared to $426 million or $0.87 per share a year ago.
On average, 18 analysts polled by Thomson Reuters expected earnings of $0.82 per share for the quarter. Analysts' estimates typically exclude special items.
Core earnings improved in Property and Casualty, Group Benefits and Mutual Funds businesses, partly offset by a decline in Talcott Resolution, the company's run-off life and annuity operation, due to the January sales of the Retirement Plans and Individual Life businesses and lower contribution from annuities.
Revenues for the quarter totaled $9.18 billion, compared to $7.66 billion in the prior year. Analysts had a consensus revenue estimate of $5.37 billion for the quarter.
Property and Casualty segment core earnings climbed 12 percent to $318 million from a year ago and combined ratio at the segment improved to 93.6 percent from 95.6 percent last year.
Core earnings at Talcott Resolution slid 26 percent to $161 million, while Group Benefits division improved by $25 million. Core earnings at Mutual funds were flat at $20 million.
The company executed a major portion of its capital management plan and eliminated the currency and equity market risk of the Japan variable annuity block with an expanded hedging program.
'Talcott Resolution is now capital self-sufficient, the company's capital flexibility is significantly enhanced, and our capital generation outlook is improved,' said Christopher Swift, chief financial officer of the company.
In February, Hartford said it expects to reduce debt by about $1 billion, including the repayment of the 2013 and 2014 debt maturities totaling $520 million.
The company has been weaning itself from non-core businesses. In September, Hartford agreed to sell its individual life insurance business to Prudential Financial Inc. (PRU), to focus more on property and casualty, group benefits and mutual fund businesses.
Hartford stock closed Monday at $27.21, up 0.33%, on a volume of over 5 million shares on the NYSE. In after hours, the stock dropped 0.22%. In the past year, the stock has trended in a range of $15.65 - $28.12.
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