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Nationwide Reports Lower 2nd Quarter Net Income

By Staff Writer

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NU Online News Service, July 30, 10:05 a.m. – Nationwide Financial Services Inc., Columbus, Ohio, is reporting $82 million in net income for the second quarter on $797 million in revenue, compared with $114 million in net income on $774 million in revenue for the second quarter of 2001.

Operating income, which excludes investment gains and losses, fell to $107 million, from $113 million.

Net results for the latest quarter include $15 million in losses on investments in bonds issued by WorldCom Inc., Clinton, Miss., and $12 million in losses on other investments, Nationwide says.

Nationwide sells annuities and institutional investment products as well as life insurance.

The annuity unit is reporting $54 million in operating income on $306 million in revenue for the second quarter, compared with $62 million in operating income on $274 million in revenue for the comparable quarter in 2001.

Sales of individual fixed annuities increased 46%, to $695 million, but sales of variable annuities fell 25%, to $1.2 billion.

The institutional unit is reporting $54 million in operating income on $265 million in revenue, compared with $54 million in operating income on $284 million in revenue.

The life insurance unit is reporting $48 million in operating income on $220 million in revenue, up from $44 million in operating income on $207 million in revenue.

Earnings on investment life products and sales of corporate-owned life insurance were strong, Nationwide says.

Sales of individual variable-universal life were down from the second quarter of 2001, but they have increased since the first quarter, the company says.