Conseco’s quarterly operating profits rose 5 percent, beating expectations, as the struggling U.S. life insurance and loan firm continued its efforts to shore up its finances.
The Carmel, Ind.-based company reported fourth-quarter operating profits, excluding one-time items, of $41.1 million, or 13 cents per share compared with a profit of $39.3 million, or 12 cents per share, in the same quarter last year.
Analysts expected 8 cents per share profit. Conseco’s fourth-quarter net result, including one-time charges totaling $420 million, was a loss of $378.7 million, or $1.16 per share, compared with a loss of $62.6 million, or 19 cents per share, in the same quarter 1999.
he charges primarily related to a change in the way Conseco accounts for some income and a provision to cover bad loans made to some executives to buy Conseco shares.
Conseco took a charge of $188 million in the quarter resulting from abandoning its ‘gain on sale’ treatment of income from bonds backed by the loans it makes to customers.
The company now uses the ‘on-book receivables’ method of accounting, which analysts and investors say gives a better idea of the company’s performance.
Reuters Securities reported that the company also took a charge of $78 million to cover losses on loans it made to some directors and officers to buy Conseco shares, which went bad after the price of Conseco’s stock tumbled.
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