Shares of Protective Life fall after earnings miss estimates
NEW YORK—Shares of Protective Life Corp., an insurance and investment products provider, tumbled Thursday afternoon, a day after it reported a steep decline in first-quarter earnings.
Protective Life shares fell $2.06, or 4.7 percent, to $41.63 in afternoon trading. Shares have traded between $35.98 and $51.30 during the past year.
On Wednesday, Protective Life said its first-quarter earnings fell 60 percent to $35.9 million, or 50 cents per share, from $90.6 million, or $1.27 per share, during the same quarter a year earlier.
Analysts polled by Thomson Financial, on average, forecast earnings of 98 cents per share for the quarter.
Protective Life took a charge of 23 cents per share during the first quarter tied to losses on investments. It earned 6 cents per share on investments during the year-ago period.
It also recorded charges of 5 cents per share to reduce the value of items in its annuity segment and 19 cents per share to reduce the value of securities that have been designated for trading.
Excluding those charges, Protective Life's operations were "solid," the company's chairman, president and chief executive, John Johns, said in a statement.
Lehman Brothers analyst Eric Berg said that even though the charges do not directly relate to selling insurance, "the management of investments, including of derivatives, we do view as integral to insurance," Berg wrote in a research note.
A bright spot for Protective Life was its annuity sales, Banc of America Securities analyst Tamara Kravec said.
"Annuity sales showed strong momentum in the first quarter, coming in at $612 million, up 90 percent year-over-year and beating our estimate of $380 million," Kravec wrote in a research note. Kravec attributed the better-than-expected annuity sales to sales of value adjusted annuities.
