Shares of Conseco Inc. tumbled Tuesday, falling as much as 19.6% after an early-morning conference call during which executives and analysts squared off over second-quarter earnings results.

On an up day for financial stocks, Conseco lost 17.61% to close at $11.70. Investors reacted to second-quarter numbers, released late Monday evening, that showed a $30.3 million loss. That was a substantial improvement from the year-ago quarter, when it lost $407.2 million. The Carmel, Ind.-based insurance and finance company blamed the loss on a number of special charges — totaling about $100 million — that were part of the legacy of the “old” Conseco.

Conseco has been on a path to strengthen its balance sheet since Gary Wendt became the chairman and chief executive officer in June 2000.

Mr. Wendt stopped cash-flow problems on the consumer finance side by selling five business lines and created a strategy to raise capital by selling $2 billion worth of noncore assets over the next three years. He also approached banks with a debt repayment and marketing plan and helped the company restore its A.M. Best rating.

The changes resulted in some improvement in the stock price, which rose to just more than $10 a share in July 2000 from less than $5 right before Mr. Wendt took over.

During the second quarter Conseco took a $21 million impairment charge for interest-only securities; a $22.8 million writedown from a change in yield, spread, and duration assumptions in its annuity business; a $22 million loss on collateralized debt obligations in the investment portfolio; and a $54.9 million loss from operations and other intangibles.

During the conference call analysts challenged a number of the figures presented, provoking Mr. Wendt’s response: “If anybody is suggesting that we are cooking the books, I would like to have a face-to-face meeting with them.”

Credit Suisse First Boston analyst Caitlin F. Long maintained her “buy” rating on the stock Tuesday but lowered her 12-month target price to $22 from $25 per share. She revised her estimate to 90 cents from $1 for the full year and to $1.50 from $1.75 for 2002.

Meanwhile, Merrill Lynch analyst John-Paul Crutchley downgraded HSBC Holdings PLC, which released its earnings Monday, to “neutral” from “accumulate.” The financial services company’s conservative approach to risk management should protect it if the global economic environment continues to deteriorate, but if it brightens HSBC would not perform as well as some of its more aggressive competitors, he wrote in a research note Tuesday.

The American Banker index of the top 50 stocks rose 0.70%, while the index of the top 225 stocks increased 0.82%. The Dow Jones industrial average gained 0.55%, and the Nasdaq composite fell 0.32%.

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