LOCAL BUSINESS
Allstate reports profit
Allstate Corp., the largest publicly traded U.S. home and auto insurer, posted a second-quarter profit Tuesday as costs tied to natural disasters fell. The company employs 1,248 in Hudson in claims, accounting, sales and other operations.
Net income was $423 million, or 86 cents a share, compared with a loss of $624 million, or $1.19, a year earlier, the Northbrook, Ill.-based company said. Operating profit, which excludes some investment results, was 87 cents a share, beating the 52-cent average estimate of 23 analysts surveyed by Bloomberg News.
Chief Executive Officer Tom Wilson, 54, has been seeking rate increases and changing terms of policies to boost profitability as severe weather increases claims costs and low interest rates put pressure on investment income from the company’s bond portfolio. Tornadoes and other storms in the U.S. erased profit in last year’s second quarter.
“Allstate is trying to drive higher margin and is making a reasonable amount of progress,” Josh Stirling, an analyst at Sanford C. Bernstein & Co., said in an interview before results were announced. “Last year was a dramatic event, and it was a shocking event, too, because you had so many large tornadoes.”
Allstate shares climbed 4.1 percent to $35.70 in extended trading in New York after results were announced. Book value, a measure of assets minus liabilities, advanced to $39.73 a share from $38.57 as of March 31.
B&W awarded contract
Babcock & Wilcox Company Co. (NYSE: BWC) announced its Power Generation Group unit has been awarded a contract worth more than $40 million to design, supply and install boiler pressure parts and what is called an overfire air system, as well as perform boiler reinforcement, for the Big Stone power plant in South Dakota operated by Otter Tail Power Co.
B&W said it will make improvements to a 450 megawatt coal-fired power plant’s boiler as part of a new air quality control system.
Insurer’s profits drop
National Interstate Corp. (Nasdaq: NATL) reported a drop in profits for its second quarter from a year ago. The specialty insurer said it had net income of $7.3 million, or 37 cents a share, down from $8.1 million, or 41 cents a share, for the year-ago period. Net premiums written totaled $136 million, up from $134 million.
Wayne Savings shares up
Wayne Savings Bancshares Inc., the Wooster-based holding company for Wayne Savings Community Bank, said it had net income of $624,000, or 21 cents a share, for its quarter ended June 30. That was up from $515,000, or 18 cents a share, for the same period a year earlier.
The company said profits were higher because of a decrease in its provision for loan losses and increased non-interest income.
WORKPLACE
Defense layoffs exempted
The federal law requiring worker notification of mass layoffs doesn’t apply to defense companies and other government contractors affected by the possibility of across-the-board budget cuts beginning early next year, the U.S. Department of Labor said.
The department said it would be “inappropriate” for companies to send 60-day notices to their employees given the uncertainty about whether the reductions will occur or which jobs will be cut.
Legal notice “to employees of federal contractors, including in the defense industry, is not required 60 days in advance of Jan. 2, 2013, and would be inappropriate, given the lack of certainty about how the budget cuts will be implemented and the possibility that the sequester will be avoided before January,” the department said. Companies led by Lockheed Martin Corp., the world’s largest defense contractor which has Akron operations, have said federal and state laws might require notifications of potential job cuts days before the Nov. 6 election unless automatic defense reductions of $500 billion over a decade that would start on Jan. 2 are averted.
AUTO INDUSTRY
Soccer deal causes problem
General Motors ousted Joel Ewanick, the high-profile marketing chief brought in to change the automaker’s image, after company officials questioned the propriety of a deal he negotiated to sponsor the Manchester United soccer team in the U.K., people familiar with the matter said.
GM agreed to pay more than $39 million per year for seven years to put its Chevrolet brand on the team’s jerseys. That’s 25 percent more than current sponsor Aon Corp. pays.
Compiled from staff and wire reports
