Conseco Sees 2Q Profit Amid Fewer Losses; Shares Rise

   DOW JONES NEWSWIRES 
 

Conseco Inc. (CNO) projected it would swing to a second-quarter profit due to fewer investment losses, and expects to report sharply higher core earnings.

Shares of the insurer rallied 16% to $2.19 in after-hours trading. Still, the stock has lost more than three-quarters of its value from its 52-week high last August.

Conseco expects to report earnings of $15.8 million to $27.8 million, or 9 cents to 15 cents a share, compared with a prior-year loss of $488.5 million, or $2.65 a share, which was caused by $513.7 million of net realized investment losses. Operating profit, which excludes investment gains and losses, is seen jumping to $40.8 million, or 22 cents, up 62% from a year earlier.

Analysts polled by Thomson Reuters most recently expected earnings of $37.3 million and operating earnings of 22 cents a share.

Conseco sees its Bankers Life segment's total collected premiums dropping 4.2%. The Bankers Life business distributes insurance through career Bankers insurance agents. Premiums for the smaller Conseco Insurance Group segment are seen dropping 9%, but inching up 3.9% in the Colonial Penn segment.

In December, Conseco finished transferring many of its long-term care policies to a new state-supervised nonprofit trust, Senior Health Insurance Co. of Pennsylvania, allowing it to concentrate on its core business. The policies were a drag on earnings because they were underpriced and required continued capital infusions to meet policyholders' long-term needs.

Conseco will release its second-quarter results on Aug. 4.

-By Kevin Kingsbury and John Kell, Dow Jones Newswires; 212-416-2354; [e-mail]