A successful venture capital portfolio sale should help Phoenix Companies Inc. improve future earnings, analysts say.[@@]

Phoenix, Hartford, is reporting $26 million in net income for the latest quarter on $657 million in revenue, up from $7.1 million in net income on $660 million in revenue in the third quarter of 2004.

The company managed to wring $10 million in operating earnings out of its asset-management business, even though $3.5 billion in cash flowed away.

Thanks to a 44% increase in sales of fixed universal life products, wholesale sales were up 34%.

Andrew Kligerman, a senior life insurance analyst at UBS Investment Research, New York, says he was pleasantly surprised by the jump in wholesale sales.

Meanwhile, an agreement Phoenix has negotiated to sell 75% of a large venture capital portfolio “should result in significantly improved earnings and lower overall earnings volatility,” says John Nadel, an analyst at Fox-Pitt, Kelton, New York.

Phoenix probably will use the cash from the venture capital portfolio sale to build capital levels at its life and annuity operations, Nadel says.

Phoenix did not give the exact value of the venture capital deal, but the company says its venture capital partnerships had an equity value in net assets of $252 million Sept. 30.