Allstate Corp. (NYSE:ALL) said Wednesday that its net income fell, but operating profit beat expectations, sending shares higher in after-hours trading.
The insurance giant said net income fell 62.7% to $145 million or 27 cents a share, compared with year-ago profit of $389 million or 72 cents a share, one year ago. The company noted losses in its derivatives portfolio during the quarter, yet said those losses were “more than offset” by increases in investment valuations, leading to a 3% quarterly increase in book value per share.
Operating profit rose to 81 cents a share, up from last year’s operating profit of 55 cents a share. That topped Wall Street’s expectations for 69 cents a share.
Expenses related to disaster costs fell to $636 million, down from $818 million, one year ago.
"Implementation of growth initiatives reduced the impact of catastrophe risk management and profitability actions, but has not yet generated sufficient volume to increase overall policies in force,” said Thomas J. Wilson, chairman, president and chief executive officer of Allstate, in a release. “Allstate Financial's operating income significantly rebounded reflecting progress on its strategic repositioning and the benefit of reserve actions. Strong investment results reflect our risk mitigation and return optimization strategies.”
Shares of Allstate Corp. rose 6 cents, or less than one percent in Wednesday’s session, closing at $28.61 a share. The stock gained another 42 cents or 1.5% in after-hours trading.