Loews Corp. Earnings Beat But Retail Raises Leadership Concerns

Loews Corporation, on Tuesday, announced earnings that topped analyst estimates on multiple counts. It reported net income of $1.67 per share as compared to $1.58 in the same period a year ago and management expressed confidence in its business momentum.

Revenue jumped 8.46% year-over-year (YoY) to $4.27 billion during the quarter. However, retail sentiment shifted into the extremely bearish territory (22/100) from the bullish zone a day ago as the firm disclosed that its long-time President and CEO James Tisch is set to retire as of December 31, 2024, after 25 years at the helm. The board has elected his son, Benjamin Tisch, as the President and CEO. Shares of the company originally jumped but faded through mid-day.

The conglomerate said that its subsidiary CNA Financial Corporation's net income attributable to Loews improved YoY led by higher net investment income. This, however, was partially offset by higher catastrophe losses.

CNA is one of the largest US commercial property and casualty insurance companies and its net income attributable to Loews Corporation rose 14% to $291 million. Net written premiums increased 6% led by strong retention and new business while net earned premiums rose 7%.

Its subsidiary Boardwalk Pipelines' results also improved YoY, mainly driven by increased revenues from re-contracting at higher rates and recently completed growth projects. Net income rose 23% to $70 million and earnings before interest, tax, depreciation, and amortization (EBITDA) rose 13% to $240 million.

In contrast to those subsidiaries, Loews Hotels reported a fall in net income to $35 million during the quarter vs. $74 million in the same period a year ago. Its adjusted EBITDA also fell about 2% YoY to $98 million.

During the quarter ended June 30, Loews Corporation repurchased 2.40 million shares of its common stock for a total cost of $180 million. Loews has repurchased an additional 0.2 million shares for $14 million so far in the third quarter.

Photo Courtesy: Towfiqu Barbhuiya

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