Shares of insurance carrier CNA Financial rose slightly Wednesday after the company said it would shed about 10 percent of its 24,000 workers in a cost-cutting plan.
The insurer unveiled the plan as it reported a second quarter profit slid to $64 million, or 33 cents a share, from $126 million, or 67 cents, a year ago. Analysts surveyed by Zacks Investment Research expected earnings of 57 cents a share.
The profit excludes investment gains in the quarter of $146 million, or 79 cents, compared to $109 million, or 59 cents in the year-ago period. Revenue was $4.4 billion compared to $4.2 billion in the year-ago period.
"CNA's results reflect continued soft market conditions, as well as higher catastrophe losses compared to last year," CNA Chairman and CEO Dennis H. Chookaszian said in a statement.
Shares of CNA Financial rose 5/8 to 38 3/8.
Catastrophe losses in the second quarter cost CNA $82 million, or $0.44 per share as compared to $29 million, or $0.16 per share, for the year-ago period.
CNA said it would take charges up to $400 million to pay for the reorganization. The company plans to finalize its reorganization plan by the end of the year, recording a pre-tax charge of $100 million to $140 million.
Over the next 12 to 18 months, the company said it expects additional pre-tax transition costs of $200 million to $260 million related to the restructuring. The company said the pre-tax impact of the charges on its third quarter earnings will be $175 million to $260 million.