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Allstate's 4Q profit falls
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February 10, 1999: 12:21 p.m. ET
Insurer suffers from rising costs related to catastrophe losses, net income dips 13%
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NEW YORK (CNNfn) - Allstate Corp. posted mediocre fourth-quarter earnings Wednesday, suffering a 13 percent decrease in net income as rising costs related to catastrophe losses took their toll on the company's bottom line.
For the quarter ended Dec. 31, the nation's second-largest home and auto insurer recorded net income of $760 million, or 93 cents per diluted share, on revenue of $6.45 billion. This compares to net income of $871 million, or $1.01 per diluted share, for the same quarter of 1997. Revenue for that quarter totaled $6.3 billion.
Operating income fell by roughly 7 percent to $641 million, or 78 cents per diluted share. This compares to operating income of $691 million, or 80 cents a share, in the year-ago quarter.
Allstate's earnings were in line with Wall Street expectations, according to First Call.
"Allstate posted strong fourth-quarter results despite the competitive sales environment and higher catastrophe losses as compared to unusually low losses experienced last year," said Allstate (ALL) Chairman and Chief Executive Officer Edward Liddy.
For the year, the company's overall revenue increased 3.7 percent to $25.88 billion while net income rose by roughly 6 percent to $3.29 billion, or $3.94 per diluted share. This compares to revenue of $24.9 billion with net income of $3.1 billion, or $3.56 per diluted share, in 1997.
"Allstate's 1998 financial performance strengthens our ability to execute the strategies designed to take us to the next stage in our growth," Liddy said.
Shares of Allstate traded up 11/16 to 36 during the morning session on the New York Stock Exchange Wednesday.
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Allstate
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