Aegon's profit rises 6.6%, but falls short of estimates

Firm with 1,000 workers here sees stock drop 7%

May 04, 2001|By Bill Atkinson | Bill Atkinson,SUN STAFF

Aegon N.V., the large Dutch insurance company that employs about 1,000 people in Baltimore, reported yesterday that its first-quarter profit rose 6.6 percent, partly driven by strong sales of life insurance products in North America.

The company made 535 million euros ($494 million) in the quarter that ended March 31, falling short of the 550 million euros projected by analysts, the Dow Jones News- wires reported. Aegon made 41 euro cents (38 cents) per share in the quarter, compared with 38 euro cents (37 cents) per share in the same period a year earlier.

Aegon shares, which trade on the New York Stock Exchange, lost $2.44, or nearly 7.2 percent, yesterday to close at $31.64.

Aegon attributed the decline to significantly lower profit at the non-insurance operations of its Transamerica subsidiary.

"The first quarter resulted in a good autonomous earnings performance in all our major businesses, coupled with continued increases in production," said Kees J. Storm, Aegon's executive board chairman. "Despite the declined stock markets in the first quarter, we are confident about the future."

Aegon said it expects profit and earnings per share to increase 10 percent to 15 percent this year.

While Aegon sells insurance and investment products worldwide, its North American operations made $338 million in the quarter, up 15 percent from the prior year.

Profit from the North American unit was fueled by strong sales of life insurance products, which rose 17 percent, to $485 million. Income from sales of traditional life insurance rose 16 percent, to $227 million.

The unit, which includes the United States, Canada and Mexico, represented 68 percent of Aegon's profit in the quarter. It is run by Donald J. Shepard, chairman, president and chief executive of Aegon USA, who lives in Baltimore.

Shepard helped engineer Aegon's $10.8 billion acquisition of Transamerica Financial Corp. of San Francisco, which was completed in July 1999.

Although Aegon is based in The Hague, Netherlands, it employs about 1,000 people in Baltimore. They work for Aegon's Monumental Division, which sells life insurance through employee agents; and the Aegon Special Markets Group, which sells supplemental life and health insurance products.

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