Allstate Corp., the nation's second-largest property and casualty insurer after State Farm, said Wednesday that fourth-quarter earnings rose 50 percent despite an increased estimate of its steep payout obligations from last year's Florida hurricanes.
The company cited increased premiums and underwriting income and gains from its financial unit as enabling it to more than offset unusually high catastrophe losses from the hurricanes that devastated Florida and the Southeast.
It said it had taken an additional $239 million in storm-related losses after conducting more thorough inspections of damage from the storms, which occurred near the end of the previous quarter. That left the insurer's revised total of after-tax losses from the hurricanes at about $1.3 billion.
Net income for the last three months of 2004 was $1.14 billion, or $1.64 per share, up from $761 million, or $1.08 per share, a year earlier when catastrophe losses were even higher because of severe wildfires in Southern California.
Excluding certain items, Allstate said operating income was $1.42 per share. Analysts surveyed by Thomson First Call had estimated the Northbrook, Ill.-based insurer would post per-share earnings of $1.40.
Revenues rose to $8.88 billion from $8.26 billion, up 7.5 percent. That easily exceeded the Wall Street estimate of $8.63 billion.
The company gave operating earnings guidance for 2005 of a range between $5.40 per share and $5.80 per share, with a mid-range below analysts' estimate of $5.72.
Allstate CEO Edward Liddy called it "a great quarter and a great year," with results that should be sustainable.
Net profits for the year were $3.18 billion, or $4.54 per share, up from $2.71 billion, or $3.83 per share. Revenues were $33.9 billion, up 5.6 percent from $32.1 billion.
Allstate shares closed up 17 cents at $51.10 on the New York Stock Exchange before the earnings report was released. They fell 42 cents in after-hours activity.