By Alistair Barr
Hartford Financial Services Group Inc. shares fell 21% Friday,
hours after the insurer posted an $806 million fourth-quarter loss
and cut its divdend to preserve capital in the midst of a withering
financial crisis.
Hartford Financial's shares slumped to $11.95 ahead of the open,
tracking declines in the aftermarket on Thursday.
"[The decline] seems an overreaction as the results are not so
far from the range of outcomes investors might have anticipated,"
Citigroup analysts said Friday. "We believe the market anticipates
a downgrade, but should the rating agencies not act over the next
day, we believe the stock will rally off lows it will set at the
market open."
The quarterly net loss worked out to $2.71 a share, a reversal
from net income of $595 million, or $1.88 a share, generated in the
final three months of 2007, the Hartford, Conn., insurer (HIG)
reported.
Excluding net realized investment gains and losses and other
items, Hartford Financial said the loss was $208 million, or 72
cents a share.
Hartford Financial had been expected to make $1.25 a share,
according to the average estimate of 16 analysts in a FactSet
Research survey.
Hartford Financial also said it plans to reduce its quarterly
dividend to 5 cents a share, a move designed to preserve roughly
$350 million of capital a year. The company paid a quarterly
dividend of 32 cents a share early this month.
"We are optimistic about the resolve shown by the federal
government in its efforts to stimulate the economy, but the risks
still appear severe," Chief Executive Ramani Ayer said. "As a
result, it is prudent for us to put capital preservation and risk
mitigation at the forefront of our priorities in 2009."
-Alistair Barr; 415-439-6400; AskNewswires@dowjones.com