Updated: November 5, 2010 12:48PM
Property and casualty insurer Allstate Corp. said Wednesday that its net income surged 66 percent in the third quarter as investment losses eased.
The performance nevertheless missed Wall Street expectations and the Northbrook-based company's stock slipped in after-hours trading.
For the three months ended Sept. 30, the company earned $367 million, or 68 cents per share. That's compared with $221 million, or 41 cents per share, in the year-ago period.
Not including one-time charges, the company said it earned 83 cents per share in the quarter. By that measure, analysts polled by Thomson Reuters on average expected a profit of 98 cents per share.
Allstate stock was down $1.30, or 3.9 percent at $31.16 in after-hours trading. The shares had already closed down 19 cents after tornado watches were issued across the Southeast after a massive storm lashed the central U.S.
For the quarter, Allstate said revenue was $7.91 billion, up 4.3 percent from $7.58 billion a year ago. The company also benefited from a drop in catastrophe losses, which fell to $386 million from $407 million.
Net investment losses eased to $144 million, from $519 million a year ago. Higher gains on investment sales and a drop in derivative losses drove the improvement.
Premiums written in the quarter generated $6.77 million in the quarter, down from $6.81 million.
The combined ratio, which measures an insurance company's losses and expenses, worsened to 95.9 percent, from 94.7 percent in the year-ago quarter.
A ratio above 100 means that for every premium dollar taken in, more than a dollar went to cover claims and expenses. A figure below 100 means the company made a profit on its insurance operations.