CHICAGO (AP) - Allstate Corp., the nation's No. 2 property and casualty insurer, said Wednesday its second-quarter profits climbed 16 percent on strong auto insurance sales but operating income fell as the company paid significantly more in catastrophe-related costs.
The results fell short of Wall Street's expectations and Allstate's stock edged lower in after-hours trading.
Net income for the April-through-June period was $1.40 billion, or $2.30 per share, up from $1.21 billion, or $1.89 per share, for the same period a year earlier.
The Northbrook-based company said operating earnings were $1.07 billion or $1.76 per share. That was 4 cents per share less than the estimate of analysts surveyed by Thomson Financial.
Revenue increased 7 percent to $9.46 billion from $8.88 billion, or better than the $9 billion forecast by analysts.
Allstate said its auto insurance business continued to grow, adding 300,000 customers for its Your Choice Auto in the quarter to bring the total for that relatively new program to 2.4 million.
Operating income fell because of increased costs for reinsurance and catastrophes, or events generating more than $1 million in claims.
Catastrophe losses for the quarter jumped 70 percent to $433 million from $255 million a year earlier.
Moving to lessen the impact of future catastrophes also hurt results. Allstate bought billions of dollars in reinsurance earlier this year to cover the costs of future natural disasters and claims. The company said the cost of the reinsurance would be partly offset by higher premiums.
Allstate shares declined 26 cents in after-hours trading after gaining 14 cents to $60.56 in the regular session. The stock is down 7 percent in 2007.
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