Loews Corporation — 2023 Q3
Transcript
Each turn shows the speaker, their inferred role, the section, and that turn's net sentiment (×1000).
[ The transcript was presubmitted by Loews Corporation. No live call was conducted for the third quarter earnings call. ]
For the third quarter of 2023, Loews reported net income of $253 million or $1.12 per share, compared with net loss of $22 million or $0.09 per share in last year's third quarter. This year's third quarter results included a $37 million non-cash after-tax charge for the termination of a defined benefit pension plan. As a reminder, last year's third quarter financials were restated for the adoption of the LDTI (Long Duration Targeted Improvements) accounting standard.
we recorded after-tax investment income of $24 million in 2023's third quarter compared to an after-tax loss of $15 million in the third quarter of 2022. The increase was driven by improved performance in the parent company's common stock portfolio as well as higher interest rates on the cash and short-term investment portfolio.
Loews has been investing a substantial amount of capital into Loews Hotels. What are the expected returns on those projects?
Most of our subsidiaries have fixed rate debt. Altium has floating rate debt, but approximately half is hedged until 2028. While refinancings will result in higher interest expense, the overall financial impact to Loews is positive as CNA is able to re-invest its portfolio at more attractive yields.
In the past we have purchased CNA shares to signal to the market that we believe that CNA is significantly undervalued, and this time was no different. I would also point out that this purchase did not impede our ability to continue buying Loews shares. Year-to-date we have spent $775 million to repurchase 12.9 million shares of Loews.
Jim, would you like to make any general remarks about the economy?
In my second quarter remarks I discussed how, in the past 10 years, we got to where we are today in terms of the economy and interest rates. At that time, I made the statement that fixed income securities were becoming an investible class of assets for money managers after being non- investible for the past 15 years. Today, ten-year notes yield about 4.85%, up from just under 4% three months ago. While fixed income securities may be investible, I also said not to expect capital gains from investing in those securities. They would provide a good flow of income but might not provide much in the capital gains department.