Conseco ( CNO) reported a preliminary fourth-quarter loss and said that the insurer's auditors have raised concerns about the company's liquidity, sending shares plummeting more than 50%. The Carmel, Ind.-based insurer said its preliminary fourth-quarter numbers showed a loss of $406.8 million, or $2.20 a share, ballooning from a loss of $71.5 million, or 38 cents a share, in the same quarter a year ago. Conseco said that it recorded a $367.5 million charge for discontinued operations. The insurer did not provide preliminary revenue data for the quarter. Analysts were looking for Conseco to report a fourth-quarter profit of 29 cents a share on revenue of $1.19 billion, according to Thomson Reuters, although estimates typically exclude one-time charges. Conseco said it will delay the filing of its annual report with the Securities and Exchange Commission "to finalize the analysis and disclosure related to its investment portfolio in light of unprecedented market conditions." Conseco said it will file the report no later than March 17. The company also warned that its auditors have sought additional information and analysis regarding its liquidity and debt covenant margins. If Conseco fails to provide the additional information, the auditors' report will include a paragraph about Conseco's ability to continue as a going concern. If Conseco does provide the information and the auditors conclude that there is substantial doubt over the company's viability, a paragraph will be included in the auditors' report. "The inclusion of such a paragraph, unless waived by the lenders, would be a default under Conseco's senior credit facility," Conseco said in a press release.
Much like other insurance companies, Conseco's shares were dropping Monday. Lately, the stock was down 64 cents, or 53.2%, to 57 cents a share. On Friday, Standard & Poor's cut its credit ratings on numerous companies, including Conseco, MetLife ( MET), Hartford Financial ( HIG) and Prudential Financial ( PRU), saying the troubled economy is putting increased pressure on their assets. Hartford was losing 10.3%, Prudential was down 5.3% and MetLife was off 4%. Meanwhile, AIG ( AIG) was surging 8% after the insurer recorded a fourth-quarter loss of $61.7 billion and said it would get $30 billion more in U.S. government help.