Loews Corp. (L) - Bear Of The Day

Loews Corporation’s (L) second-quarter income from continuing operations came in at 78 cents per share, substantially short of the Zacks Consensus Estimate. The lower-than-expected results primarily reflect higher net investment losses.

However, underwriting performance was impressive during the quarter. A strong rebound in investment income primarily from improved limited partnership results, were also impressive during the quarter.

While the spin-off of Lorillard in 2008 eliminated the company’s overhang of tobacco litigation, we think that the continuation of a stressed economic environment will have a restrictive effect on the top-line growth of the company. As such, the shares carry an Underperform recommendation from us.

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