Zacks_Analysts' Blog : Hartford Estimates 3Q Credit Loss - Analyst Blog

On Friday, Hartford Financial Services Group Inc. (HIG) announced a credit loss projection of $61 million in the third quarter of 2011. Meanwhile, the company also declared that it has no European debt in its portfolio.

The low credit loss expectation is calculated taking into account the net unrealized gain of $2.6 billion at the end of the third quarter, which is up from $819 million recorded in the second quarter of 2011. Most of the loss has been attributed to structured securities.

Apart from the reduced credit loss, Hartford is trying to improve its financial performance by divesting its non-core businesses to focus better on its core businesses. As a result, last week, the company sold its subsidiary Trumbull Services LLC to ExlService Holdings, Inc. (EXLS).

Additionally, Hartford also announced the termination of over 500 customer service and back-office jobs. Conversely, the company is also hiring in other areas that are witnessing growth while cutting jobs in growth-shy areas.

Hartford is expected to announce its third-quarter earnings on November 2, 2011. The Zacks Consensus Estimate for third-quarter earnings is currently 71 cents per share, down about 50% year-over-year. Of the 13 firms covering the stock, 4 have revised their estimates downward, while no upward revisions were witnessed in the last 30 days.

For 2011, earnings are expected to be about $2.85 per share, down about 14% year-over-year, reflecting Hartford’s poor operating results in most sectors in the second quarter of 2011, coupled with the ongoing weakness in the economy.

Currently, Hartford carries a Zacks #3 Rank, implying a short term Hold rating. On Friday, the shares of the company closed at $16.96, down 3.96%, on the New York Stock Exchange.