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Financial Strikeout

Loews Corporation (L) missed the consensus estimate on earnings for the third quarter of 2018.

Total revenues grew to $3.60 billion from $3.52 billion in the same period last year. Net income improved to $278 million or $0.88 per share from $157 million or $0.46 per share in the prior-year period. Analysts had projected earnings of $0.98 per share.

The profit growth in the third quarter was driven by higher earnings at CNA Financial Corporation, Boardwalk Pipeline Partners LP and Loews Hotels & Co. This improvement was offset by lower results at Diamond Offshore Drilling Inc. and the parent company investment portfolio.

Loews saw an increase in CNA Financial’s earnings, driven by lower net catastrophe losses for the core property and casualty business, and a lower corporate tax rate. Earnings from Diamond Offshore were impacted by lower revenue, due to tough market conditions that affected rig utilization and average daily revenue, as well as a legal settlement.

The company now owns 100% of Boardwalk Pipeline which led to an increase in the division’s earnings. The segment’s profit also benefited from a lower corporate tax rate. Improved results at owned hotels, higher contributions from joint ventures in the Universal Orlando Resort as well as a lower corporate tax rate helped drive earnings growth at Loews Hotels & Co.

Income from the Loews Corporation investment portfolio fell mainly due to weaker returns on equity securities and alternatives, as well as a lower overall investment balance caused mainly by the purchase of the Boardwalk units in July 2018.

During the third quarter, the company repurchased 1.8 million shares of its common stock for a total value of $88 million. At September 30, there were 314.9 million shares of Loews common stock outstanding. Book value per share increased to $60.18 at September 30, 2018 from $57.83 at December 31, 2017.

Loews’ shares are down over 7% so far this year and looking at the past three months, the stock is down 9%.