Transamerica parent misses profit estimates for Q2 earnings

(Bloomberg) – Shares of Aegon NV, the Dutch owner of U.S. insurer Transamerica Corp., fell the most in almost two years after the company reported second-quarter profit below estimates and lowered its target for a key financial ratio.

The company on Thursday said net income stood at 350 million euros ($389 million) in the three months to June, missing consensus estimates of 546 million euros, according to analysts at Bryan Garnier & Co. Ltd. Lower returns from hedge-fund and energy investments and losses on interest-rate hedges hit profit, the company said.

Aegon, which is preparing for stricter capital demands next year, said it’s reducing its solvency-ratio target, a measure of available capital compared to that required to meet obligations toward policyholders. The lower target will place Aegon’s ratio, which fell in the second-quarter, below that of some competitors.

The guidance for solvency is “underwhelming,” Matthias De Wit, an analyst at KBC Securities wrote in a note to clients. He cut his recommendation on the stock to reduce from hold.

The shares fell as much as 10 percent and were 8 percent lower at 6.11 euros at 4:36 p.m. in Amsterdam.