Aegon NV posts 25% gain in net income Firm still benefiting from Providian deal

Insurance

August 14, 1998|By Sean Somerville | Sean Somerville,SUN STAFF Bloomberg News contributed to this article.

Dutch insurer Aegon NV, which has its U.S. headquarters in BTC Baltimore, said yesterday that its second quarter net income rose about 25 percent in U.S. dollars as the company continued to benefit from its acquisition of Providian Corp.

Net income for the quarter was $328 million, up from $262 million in the year-ago quarter. Net income per share was 56 cents, up 17 percent from 48 cents a year earlier, as revenue increased 32 percent, to $4.58 billion from $3.47 billion.

The company said that in the six-month period, the Providian acquisition boosted net income per share by about 16 percent, while it more than doubled total income from the Americas to $470 million.

Measured by guilders, the company's quarter profit rose 32 percent, from 503 million guilders to 664 million guilders -- short of an expectation of about 41 percent.

"It's a very sound company, but the expectation was very high and the results came out at the bottom," said Tom Sisk, who sells stocks for Smeets Securities in Antwerp, Belgium.

Aegon's shares, which are traded on the New York Stock Exchange, fell $3.06 to close at $87.25.

Aegon said it expects 1998 earnings in guilders to increase at least 25 percent and earnings per share to go up by 20 percent.

"Our very positive outlook is based on the prospects for Aegon's continued growth, in particular in the field of life and pension insurance and related financial services," Aegon NV Chairman Kees Storm said in a statement.

Aegon acquired Providian's insurance business in June 1997 for $3.5 billion, and its operations have been folded into Aegon USA in Baltimore. The acquisition of the Louisville, Ky., company has nearly doubled Aegon USA's assets.

Aegon USA operates Monumental Life Insurance Co. and the Aegon Special Markets Group, both in Baltimore, and employs more than 10,000 nationwide.

In a news release that focused on the first half of the year, Aegon NV said income from the Americas increased with help from lower operating expenses, growth in profits from the company's pension business and increased life insurance premiums.

The company said growth in its life insurance business increased earnings in the Netherlands during the first half of the year.

Pretax life insurance profit increased 13 percent.

Pub Date: 8/14/98

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