Allstate Second Quarter Results Show Massive Income Decline
August 20th, 08Allstate Corp, the largest public provider of automobile and other property insurance in America, has revealed its figures for the second fiscal quarter of 2008. The insurance giant experienced a 98% decrease in revenue since 2007. This decrease was due to the company’s quickly-devaluing investments in the catastrophic US mortgage market, as well as to this year’s spate of storms and other natural disasters, which made property-damage claims skyrocket.
The company’s revenue this quarter amounted to $25 million. During the second fiscal quarter of 2007, Allstate had made $1.4 billion. On the market, Allstate’s stock sold for $45.81 per share at the end of today. Thus, the company’s revenue for this fiscal quarter has amounted to $0.05 per share. At the same time last year, Allstate’s revenue amounted to $2.30 per share.
Allstate’s revenue this quarter that didn’t include money lost and gained from investments this quarter was significantly higher. This figure was at $683 million, amounting to $1.24 per share. Still, even this figure was lower than experts’ predictions of $1.29 per share for Allstate’s operating income.
The company lost a total of $698 million from natural disasters and the resulting spate of claims from policyholders this quarter–the biggest second-quarter natural disaster-related loss in the company’s entire history of existence. During the same time last year, Allstate lost $433 million to natural disasters.
Funds tied up in the US mortgage market cost the company an additional $1.2 billion over the course of the country’s mortgage and real estate crisis.
The company’s total investment in operations involving risky sub-prime and other high-interest loans amounts to 22% of its shareholders’ equity. As a result of this quarter’s dismal results and the housing market’s expected continuing poor performance, Allstate plans to get rid of many of its real estate-related investments, said a rep on earlier today.
Recent Additions:
- Caveman Introduces Bar Patrons To Geico Auto Insurance
- New “Hands-Free” Law Impacts California Auto Insurance
- California Ponders Environment-Friendly Auto Insurance
- Auto Insurer Progresses Into Massachusetts
- Expensive Fuel Equals Cheaper Insurance, Says State of Idaho
