St. Paul core earnings drop 74%, partly because of storm losses

November 04, 1998|By Bill Atkinson | Bill Atkinson,SUN STAFF

The St. Paul Cos., the Minnesota insurer that bought USF&G Corp. earlier this year, said yesterday that core operating earnings fell 74 percent in the third quarter due to storm losses and weaker prices in its property and casualty business.

The country's eighth-largest insurer said core operating earnings -- which do not include one-time charges or gains -- were $47.7 million in the quarter that ended Sept. 30, or 19 cents per diluted share, compared with $184.4 million, or 73 cents per diluted share, for the same period a year ago.

Analysts surveyed by Zacks Investment Research expected the company to make 15 cents a share.

Douglas W. Leatherdale, St. Paul's chairman and chief executive, said catastrophic losses in the quarter were $173.5 million, nearly five times greater than losses a year earlier.

"I want to emphasize that the underlying strength of the St. Paul has not been compromised by these catastrophe losses," he said.

Leatherdale said Hurricane Georges accounted for more than half of the losses. He said catastrophe losses this year will be close to record levels.

For the first nine months of the year, St. Paul's core operating earnings were $263.7 million, or $1.08 per diluted share, compared with $536 million, or $2.13 per share, for the same period in 1997.

Pub Date: 11/04/98

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