USF&G reports rise in core earnings 3rd-quarter profit put at $20 million

October 28, 1993|By Timothy J. Mullaney | Timothy J. Mullaney,Staff Writer

USF&G Corp. said yesterday that it earned $20 million in the third quarter as its shift toward higher-profit areas of the insurance business continued to make progress.

"The core profitability quarter after quarter is exactly what we have been aiming at," company spokeswoman Kerrie Burch-DeLuca said. "The core [of USF&G's insurance business] is now profitable and is increasingly profitable."

USF&G said its primary insurance business made $56 million during the three months ended Sept. 30, up from $43 million in the same three months of 1992. The increase was partly offset by a $37 million loss from noninsurance operations, which Ms. Burch-DeLuca said stemmed mostly from real estate and interest, and expenses not allocated to individual USF&G departments.

Overall, USF&G made $5 million during the third quarter of 1992.

The company is making more profits on lower revenues because it pulled out of unprofitable markets, Ms. Burch-DeLuca said. "It's a decline that's planned. . . . It gives you more profitability," she said.

Steven Gavios, who follows USF&G for Kidder Peabody & Co. in New York, said the 10 cents-a-share quarterly profit was in line with Wall Street's expectations. USF&G's stock closed at $13.625, down 12.5 cents.

Mr. Gavios said USF&G has been doing a good job of expanding in more profitable lines of business, such as property-casualty insurance for small and midsized businesses.

Ms. Burch-DeLuca said the company also benefited from a push to improve service offerings in its personal auto insurance lines, as well as from the absence of disasters such as Hurricane Andrew, which depressed 1992's results.

USF&G Corp.

Ticker ... ... ... ... ... Yesterday's

Symbol ... ... ... ... ... Cls. ... Chg.

FG ... ... ... ... ... ... 13 5/8 .. .. -Period ended

Sept. 30 ... ... ... 3rd qtr. ... ... ... Year ago ... ... Chg.

Revenue .. .. .. ... $755,000 ... ... ... $1,011,000 .. .. -25.3%

Net Income .. .. ... $20,000 ... .. .. .. $5,000 ... .. .. +300.0%

Primary EPS .. .. .. $0.10 ... ... ... .. $(0.02)* ... ... --

... ... ... ... ... 9 Mos. ... ... ... .. Year ago ... ... Chg.

Revenue ... ... ... $2,450,000 ... ... .. $2,858,000 .. .. -14.3%

Net Income .. .. .. $106,000 ... ... ... $15,000 ... ... .. +606.7%

Primary EPS .. ... $0.83 ... ... ... ... $(0.25)* ... .. .. --

* Loss per-share reflects adjustment for payment of dividends on preferred stock.

Figures in thousands (except per share data)

By dialing Sunfax at (410) 332-6123 and entering the code 5665, readers can receive, by fax, a free copy of the USF&G third-quarter earnings report.

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