Phoenix Reports $46 Million Quarterly Loss, Though Insurer is Still Reviewing Financial Data

by Categorized: Uncategorized Date:

The Phoenix Cos. on Tuesday reported a net loss and an operating loss for the quarter.

The Hartford-based life insurer and annuity company delayed its quarterly report because it is in the process of restating its finances for the first two quarters of this year and for the past three years.

“Since there may be changes to prior period results, the company is not providing comparisons of any third quarter or nine-month 2012 results to any prior periods until the restated financial statements have been filed with the (U.S.) Securities and Exchange Commission,” the company said.

The company said it had a net loss of $45.8 million, or $8.04 per share, for the three-month period ending Sept. 30. Last year, the company reported net income of $31.8 million, or 27 cents per diluted share, for the third quarter.

Phoenix reported an after-tax operating loss of $62.6 million, or $10.98 per share. Last year, the company reported operating income of $29 million, or 25 cents per diluted share, for the third quarter of 2011.

The company’s operating loss was driven by a $63.4 million charge related to the company’s review of actuarial assumptions and $23 million on “adverse mortality,” meaning that customers died sooner than expected.

On Aug. 10, the company took a reverse stock split, giving shareholders 1 share for every 20 shares they owned in the company. The losses are represented in the new per-share amounts.

Financial results for the quarter are “unaudited interim results prepared by management,” the company said. Phoenix hasn’t closed its books for the third quarter and continues to review the estimated results.

Phoenix announced on Nov. 8 that it would restate its financial performance for the first two quarters of this year and for the past three years.

Annuity deposits for the quarter were $211 million, which is down 24 percent from $279 million that the company reported last year for the third quarter of 2011. The company said it had $5 billion in annuity funds under management as of Sept. 30.

Life insurance annualized premium was $800,000 for the quarter, which is double the $400,000 in annualized premium the company reported last year for the same period in 2011.

The company had $116.5 billion gross life insurance in-force as of Sept. 30, which is the value of existing accounts, compared with $127.4 billion that it reported having a year earlier.

Phoenix CEO James D. Wehr, said in a prepared statement, “We are working diligently to complete the restatement. In the meantime, we believe it is important to report our estimated third quarter 2012 results to the extent possible before our financial statements are filed with the SEC.”

On Sept. 20, the Phoenix board authorized a program to buy back $25 million in outstanding shares of common stock, but the company will not start that effort until after it has restated its financial statements.

Phoenix shares were down 40 cents to $22.42 on Tuesday.

A previous version of this blog post incorrectly stated the percent change in annuity deposits, the value of life insurance in-force in 2011 and the annualized premiums for 2011.

About Matthew Sturdevant

Full-time staff journalist at The Hartford Courant and magazine freelancer with a master's degree in writing from Dartmouth. My work has appeared in The Los Angeles Times, The Chicago Tribune, Taiwan News, The Baltimore Sun and many other news sources. My blog has been referenced by Politico.com, the Kaiser Family Foundation, the Georgetown Law Library and a number of organizations in healthcare and business. Sturdevant’s blog is "a well-written wealth of ideas," said The Donald W. Reynolds National Center for Business Journalism, (businessjournalism.org, May 18, 2011). I have experience writing for newspapers, magazines, Web sites and blogs as well as shooting and editing video. I made regular appearances on news-talk radio and on the NBC affiliate station in Corpus Christi, Texas. I made occasional appearances on the Fox affiliate in Connecticut promoting Hartford Courant articles.

The Courant is using Facebook comments on stories. To comment on courant.com articles, sign into Facebook and enter your comment in the field below. Comments will appear in your Facebook News Feed unless you choose otherwise. To report spam or abuse, click the X next to the comment. For guidelines on commenting, click here.