Allstate Boosts Profit Forecast

The insurer also plans a $3 billion buyback.
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Allstate

(ALL) - Get Report

swung to a higher-than-expected third-quarter profit and once again raised its earnings targets for the full year.

The insurer also said it plans a $3 billion share buyback.

Allstate posted a third-quarter profit of $1.16 billion, or $1.83 a share, compared with a year-earlier loss of $1.55 billion, or $2.36 a share. The year-ago results were weighed down by $3.06 billion in catastrophe losses, largely related to Hurricane Katrina.

The company reported an operating profit, which exclude investment losses, of $1.19 billion, or $1.88 a share, compared with the year-ago loss of $1.65 billion, or $2.52 a share. Analysts expected operating earnings of $1.78 a share, according to Thomson First Call.

Revenue fell to $8.74 billion from $8.94 billion a year earlier. Wall Street expected revenue of $8.32 billion.

"While consolidated revenues were down 2.3 percent, Property-Liability premiums earned increased despite the costs associated with our broad and substantial reinsurance program and our efforts to reduce our exposure to catastrophic losses," said Chairman and CEO Edward Liddy in a statement.

The company also said that its auto insurance business is performing "exceptionally well."

For the full year, Allstate now sees operating earnings of $7.35 to $7.50 a share, up from an earlier projection of $6.70 to $7 a share. The company has raised guidance in each of its earnings reports this year.

Allstate's stock buyback will replace its current $4 billion plan, which is set to be completed in the fourth quarter. The new program will be completed by March 31, 2008.