USF&G Corp. reported yesterday its first quarterly operating profit since 1990, as only a dividend payment to preferred stockholders pushed the Baltimore-based insurer's per-share results into the red.
The company, which has gone through a painful restructuring involving thousands of layoffs and more than $700 million in losses during 1990 and 1991, said it earned $4 million before paying the preferred dividend. Including the dividend, the company's net loss was 9 cents a share in the quarter that ended March 31.
USF&G lost $55 million, or 70 cents a share, a year ago.
"All of the restructuring stuff is gone," company spokeswoman Kerrie Burch-DeLuca said. "We have money. The earnings are coming from where they should -- the insurance company."
Analysts agreed with USF&G Chairman Norman P. Blake Jr.'s view that the results showed "a measurable positive trend is emerging."
But the analysts don't expect USF&G to become a star performer soon, given the continuing downturn in prices in the property-casualty insurance business that provides about 85 percent of its revenue.
"It is a turnaround for them," said Ellen S. Barzilai, an analyst for Alex. Brown & Sons Inc. in New York. "We think it's sustainable, not for this year, but compared to last year it's a dramatic improvement."
She predicted USF&G will just about break even this year, then earn 50 cents a share in 1993.
"We have them down for a small profit after preferred dividends in 1993," said Michael A. Lewis, an analyst for Dean Witter Reynolds Inc. in New York, who said USF&G will likely lose 25 cents a share in 1992.
Wall Street wasn't surprised by the results because USF&G had given analysts a preview on April 8. Earlier, the consensus among analysts had been that USF&G would lose 30 cents a share.
Ms. Burch-DeLuca and Mr. Lewis said USF&G's revenue has been shrinking because it has dropped lines where it wasn't making money. Revenue fell to $941 million in the quarter from $1.1 billion a year ago.
Ms. Burch-DeLuca said USF&G's core property-casualty insurance company earned $40 million, after losing $15 million a year earlier. This year's earnings were helped by less-than-usual customer claims related to the weather, Mr. Lewis said.