Equitable Holdings Inc. posted a $937 million net loss for the fourth quarter of 2019, and Wall Street yawned.
The New York-based life insurer reported that loss on $1.7 billion in revenue, compared with $1.9 billion in net income on $5.2 billion in revenue for the fourth quarter of 2018.
The net loss was due mainly to Equitable adding the change in the value of the derivatives used to hedge annuities against investment market volatility to its net results. The company recorded a $1.7 billion loss on the current market value of the derivatives for the latest quarter, compared with a $2.1 billion gain for the year-earlier quarter.
- Links to documents and other resources related to Equitable’s earnings, including a recording of the earnings call, are available here.
- An article about the possible effects of the Covid-19 on insurers is available here.
Excluding the effects of “mark to market” accounting on the value of the derivatives, the company’s earnings increased to $598 million in the latest quarter, from $504 million.
Equitable’s individual retirement unit is reporting $391 million in operating earnings on $1.1 billion in revenue, compared with $348 million in operating earnings on $1.2 billion in revenue for the year-earlier quarter.
Spending on commissions and other-distribution-related payments increased to $72 million, from $70 million.
First-year premiums increased 12%, to $2.2 billion.
The protection solutions unit is reporting $128 million in operating earnings on $848 million in revenue, compared with $37 million in operating earnings on $853 million in revenue.