Bear Of The Day: Hartford Financial

Hartford Financial Services (HIG) is scheduled to release its 1Q09 financial results on April 30, 2009. 4Q08 core loss of $0.72 per share was substantially worse than estimates. The company also reduced its quarterly dividend by 84.4% to $0.05 per share.

HIG has suffered frequent rating downgrades from all key rating agencies in the past few weeks, based on expectations for lower operating earnings, high investment losses and reduced financial flexibility. We remain concerned about additional losses in its investment portfolio and the variable annuity business, which have already threatened the capital cushion.

Thus, we suspect that the company may need to raise additional capital in the near-to-medium term. Ahead of the 1Q09 results, we are maintaining our Sell recommendation on the shares.

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