Phoenix Cos. posts wide 2nd-quarter loss, reversing year-ago profit, on tax, severance costs

Phoenix posts wide 2Q loss, stock plunges

HARTFORD, Conn. — Insurer The Phoenix Cos. on Tuesday posted a wide second-quarter loss, driven by severance costs and tax issues, sending shares down sharply.

The company lost $111.2 million, or 96 cents per share, reversing a profit of $6.2 million, or 5 cents per share in the year ago period. It posted an operating loss of $16.1 million, or 14 cents per share.

Revenue fell 11 percent to $525.7 million from $590.1 million last year.

Analysts polled by Thomson Reuters, on average, expected the company to report a profit of 9 cents per share.

The results included $68.8 million in realized losses, including credit-related impairments and losses related to investments and hedging. A loss from discontinued operations totaled $26.3 million.

The operating loss included a 16-cents-per-share hit on tax issues. Severance charges totaled 10 cents per share.

The company increased its expense reduction goal to $110 million from $65 million during the quarter. It will have eliminated approximately 380 positions, or more than 35 percent of its work force, by the end of the month.

During the quarter, Phoenix said a number of its distributors slowed or stopped selling its products because of downgrades from ratings agencies. Life insurance sales fell to $9.2 million during the quarter, from $68.9 million last year. Annuity deposits of $16 million compared with $176 million in the prior-year period.

In afternoon trading, Phoenix shares fell 44 cents, or 18.6 percent, to $1.93, after earlier trading as low as $1.55. The stock has changed hands between 20 cents and $13.98 in the past year.