Bloomberg News

StanCorp Plunges as Profit Falls on Claims, Missing Estimates

July 22, 2011

July 22 (Bloomberg) -- StanCorp Financial Group Inc., the Portland, Oregon-based disability insurer, fell the most since 2009 as profit plunged, missing analysts’ estimates.

The insurer dropped $4.22, or 10 percent, to $37 at 9:42 a.m. in New York Stock Exchange composite trading. The company had slipped 8.7 percent this year before today.

Second-quarter net income dropped 54 percent to $18.8 million, or 42 cents a share, from $41.1 million, or 87 cents, as the cost of benefits increased, the company said in a statement late yesterday. Operating earnings, which exclude some investment results, were 61 cents a share, missing the average $1.03 estimate of 11 analysts surveyed by Bloomberg.

“Higher-than-expected claims incidence in the company’s group long-term disability insurance business” are weighing on results, Standard & Poor’s said today as it lowered the counterparty credit rating to BBB+ from A- for the firm.

The insurer has raised prices to “address the higher claims in the current economic environment,” StanCorp Chief Executive Officer Greg Ness said in the statement.

--Editors: Dan Kraut, Steve Dickson

To contact the reporter on this story: Brooke Sutherland in New York at Bsutherland5@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net


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