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CHICAGO (Reuters)-Hotels, energy and financial services conglomerate Loews Corp. posted a smaller profit on Monday, as its commercial insurance affiliate CNA Financial Corp. took a large loss on a deal to lay off asbestos risks.
Loews posted a third-quarter net profit of $36 million, or 9 cents per share, compared with a year-earlier profit of $468 million or $1.08 per share. Analysts had expected a loss of 1 cent per share, according to Thomson Reuters I/B/E/S.
Excluding the asbestos loss, Loews said income from continuing operations fell on lower investment income at CNA and lower earnings at oil drilling affiliate Diamond Offshore Drilling Inc (DO.N: Quote).
CNA posted a loss of $140 million or 59 cents per share for the period. A year earlier, it earned $263 million or 86 cents per share. On an operating basis, CNA posted a loss of 66 cents per share, while analysts had expected a loss of 68 cents per share.
Loews owns 90% of CNA.
CNA's loss, and the decline in profit at Loews, were driven by a July deal in which it paid $2 billion to have Berkshire Hathaway Inc.'s National Indemnity Co. take on asbestos and pollution risks held by CNA.
CNA recorded an aftertax net loss of $365 million in the third quarter for the deal.
Aside from the asbestos loss, CNA said net operating income fell, mostly driven by declines in its noncore segments as a result of one-time gains last year.
Separately on Monday, CNA offered to acquire the minority interest in CNA Surety Corp. it does not already hold for $22 per share in cash. CNA said the offer, at a 14% premium to CNA Surety's Friday close, was worth $375 million.
CNA Financial, which currently owns 62% of CNA Surety, said the deal would help it simplify its ownership structure.