DOW JONES NEWSWIRES
Conseco Inc. (CNO) projected it would swing to a second-quarter
profit due to fewer investment losses, and expects to report
sharply higher core earnings.
Shares of the insurer rallied 16% to $2.19 in after-hours
trading. Still, the stock has lost more than three-quarters of its
value from its 52-week high last August.
Conseco expects to report earnings of $15.8 million to $27.8
million, or 9 cents to 15 cents a share, compared with a prior-year
loss of $488.5 million, or $2.65 a share, which was caused by
$513.7 million of net realized investment losses. Operating profit,
which excludes investment gains and losses, is seen jumping to
$40.8 million, or 22 cents, up 62% from a year earlier.
Analysts polled by Thomson Reuters most recently expected
earnings of $37.3 million and operating earnings of 22 cents a
share.
Conseco sees its Bankers Life segment's total collected premiums
dropping 4.2%. The Bankers Life business distributes insurance
through career Bankers insurance agents. Premiums for the smaller
Conseco Insurance Group segment are seen dropping 9%, but inching
up 3.9% in the Colonial Penn segment.
In December, Conseco finished transferring many of its long-term
care policies to a new state-supervised nonprofit trust, Senior
Health Insurance Co. of Pennsylvania, allowing it to concentrate on
its core business. The policies were a drag on earnings because
they were underpriced and required continued capital infusions to
meet policyholders' long-term needs.
Conseco will release its second-quarter results on Aug. 4.
-By Kevin Kingsbury and John Kell, Dow Jones Newswires;
212-416-2354; kevin.kingsbury@dowjones.com