Aegon parent's earnings rise 16% Dutch insurer is buoyed by U.S. operations

November 14, 1998|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

Dutch insurer Aegon NV, which has its U.S. headquarters in Baltimore, said yesterday that its net income rose 16 percent in the third quarter, fueled by a strong performance in its U.S. operation.

Aegon reported net income of $341 million for the third quarter, compared with net income of $294 million for the third quarter of 1997.

The company made 59 cents a share in the three months that ended Sept. 30, up 15.9 percent from the 51 cents made in the 1997 quarter.

"It was a solid quarter, in line with analysts' and investors' expectations," said Jason Zucker, an analyst with Bear Stearns & Co. in New York.

"They have stated goals of 20 percent earnings-per-share growth in 1998, and it looks like that will be easy," Zucker said.

For the first nine months of the year, Aegon's net income rose 27.6 percent to $985 million, or $1.70 a share, from a year earlier.

Net income was boosted by the U.S. operation and the $3.6 billion purchase of the U.S.-based Providian Corp. in June 1997. The acquisition of the Louisville, Ky.-based company was one of the largest deals in the insurance industry.

The transaction increased Aegon's assets by about 25 percent to $130 billion, and it made Baltimore-based Aegon USA the country's ninth-largest life insurer in assets, up from 15th position. Aegon USA accounts for about 50 percent of the parent company's revenue.

"It appears the deal with Providian has been a nice boost," said Colin Devine, an analyst with Salomon Smith Barney in New York. "It was a difficult quarter with respect to equity markets, but Aegon performed exactly as expected."

"It performs at the top of its peer group, and that's why it's the most expensive stock in the sector," Devine said.

Aegon's shares fell 25 cents to $95.50 on the New York Stock Exchange yesterday.

Pub Date: 11/14/98

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