Nationwide Financial Services Inc. swung to a third-quarter loss on large investment losses related to the recent financial crisis.
The Columbus, Ohio, insurance and investment company reported a net loss of $346.4 million, or $2.51 a share, after earning $147 million, or $1.03 a share, a year earlier.
Excluding net realized investment losses, Nationwide reported an operating loss of 16 cents a share, versus operating earnings of $1.08 a year earlier.
The operating loss resulted partly from the unlocking of deferred policy acquisition costs for variable annuities in response to stock declines, according to Nationwide.
It also reported $49.1 million of losses from hedge funds and private equities and the marking to market of investments. Excluding one-time items, operating earnings fell 10 cents a share, to 98 cents. Revenue dropped 57%, to $484.6 million.
The average estimate of analysts called for operating earnings of $1.04 a share on revenue of $1.1 billion, according to a poll by Thomson Reuters.
Nationwide reported $257.8 million of investment losses related to other-than-temporary impairments, $42 million from the marking to market of variable-annuity living benefit liabilities, including economic hedges, and $17.2 million of realized losses on sales.
Return on equity was negative-1.7%, compared with 11.3% a year earlier. In February, Nationwide predicted a full-year return of 11.8% to 12.2%.
Total assets declined 16%, to $102.1 billion. Net outflows fell 50%, because of lower withdrawals in the private sector and fixed annuities. Profits from the retirement plan business fell 7.2%, but life insurance profits rose 11%.