WASHINGTON (dpa-AFX) - Hartford Financial Services Group Inc. (HIG) Monday reported a surge in profit for the third quarter, largely attributed to the absence of a hefty loss from last year, related to the sale of its individual life business. Earnings for the quarter trumped analysts' expectations, as did revenues.
The Hartford, Connecticut-based company's third-quarter profit surged to $293 million or $0.60 per share from $13 million or $0.01 per share last year.
Results for the third quarter include realized losses of $105 million, mainly from variable annuity hedging programs, and an unlock charge of $67 million. Last year results included a loss of $388 million related to the company's sale of its individual life business.
Excluding special items, core earnings for the quarter increased to $505 million or $1.03 per share from $433 million or $0.90 per share in the prior year quarter. On average, 18 analysts polled by Thomson Reuters expected earnings of $0.83 per share for the quarter. Analysts' estimates typically exclude special items.
Hartford attributed the improvement in core earnings to higher profit in P&C Commercial, Group Benefits, Talcott Resolution and Corporate.
Revenues for the third quarter dropped to $5.64 billion from $6.33 billion last year. Analysts expected revenues of $4.87 billion for the period.
Commenting on the results, Chief Executive Liam McGee said, 'The Hartford's third quarter and year-to-date results demonstrate our significant progress transforming the company. Margins are improving in our go-forward businesses, contributing to a 17% year-over-year increase in core earnings, and the company continues to reduce its overall risk profile.'
Hartford has been weaning itself from non-core businesses in order to focus on property and casualty, group benefits and mutual fund businesses. In September 2012, the company agreed to sell its individual life insurance business to Prudential Financial Inc. (PRU).
Core earnings in the property and casualty unit dropped 4 percent to $263 million from $275 million a year ago, hurt by the catastrophe losses. Combined ratio worsened to 96.2 percent from 95.4 percent. Catastrophe losses totaled $66 million in third quarter.
HIG closed Monday's trading at $33.90, up $0.33 or 0.98%, on the NYSE. The stock, further gained $0.48 or 1.42% in after-hours trade.
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