- Fourth-quarter results were `disappointing,' CEO says
- Operating profit declined 35 percent from year earlier
Assurant Inc. plummeted the most since 2008 after the insurer’s operating profit slumped on deteriorating results from policies protecting mobile devices such as phones and tablets.
The insurer plunged $10.26, or 13 percent to $66.23 at 4:15 p.m. in New York trading, making it the worst-performing stock in the Standard & Poor’s 500 Index. Assurant reported late Tuesday that fourth-quarter operating profit dropped 35 percent to $65.3 million.
Chief Executive Officer Alan Colberg has been reshaping the insurer, exiting a health-insurance business to focus on the home and lifestyle sectors. He struck a deal last year to sell an employee-benefits business for more than $900 million to Canada’s Sun Life Financial Inc.
“Fourth-quarter results were disappointing and fell short of our expectations,” Colberg said Tuesday in a statement. “We believe our transformation strategy will improve results and drive shareholder value. We are focusing resources and investments in targeted markets and increasing operating efficiency.”
At the solutions unit, which covers mobile devices, profit fell by about half to $29.6 million. Expenses to launch new programs pressured results, as did the loss of a contract on tablets, the company said.
Assurant “suffered from weak mobile results” as well as currency fluctuations and higher expenses at the property unit, Piper Jaffray Cos. analysts led by John Nadel said in a note.
Fourth-quarter net income rose 32 percent to $65.7 million from a year earlier as the company booked a gain tied to the sale of an auto title business.