Salomon Cuts Conseco Rating
Salomon Smith Barney downgraded insurance company Conseco (CNC ) to sell from underperform citing various credit challenges. Analyst Colin Devine says Conseco continues to face a myriad of credit quality challenges relating to its sub-prime consumer finance unit, ongoing weak operating ratios at its life insurance operations, and self-acknowledged cash flow deficiencies at its holding company parent.
Devine is basing his downgrade on deteriorated manufactured housing (MH) loan pool performance through first two months of the fourth quarter 2001, MH industry problems that led to Green Point Financial's decision to exit sector, and ongoing challenges in home equity segment plaguing rival Providian Financial. He is also cutting his fourth quarter earnings per share estimate to $0.15 from $0.17, his 2001 estimate to $0.70 from $0.72, and 2002 to $0.80 from $1.00.