Earnings Preview: The Hartford

Hartford Financial Services Group (HIG) is expected to report Q2 earnings after market close  today, July 28, with a conference call scheduled for Tuesday, July 29 at 10:00 am ET.

Guidance

Analysts are looking for EPS of $2.10 on revenue of $7.21B. The consensus range for EPS is $1.95 to $2.37, according to First Call.

Analyst Views

The Wall Street Journal's "Heard on the Street" column today published a pessimistic prognosis on insurance companies, predicting that the credit crisis would cause companies in the sector to report "sizeable losses." On the other hand, Barron's recently identified Hartford Financial as having one of the ten lowest P/E ratios in the S&P 500. Investing in stocks with low P/E ratios has historically been a winning formula, Barron's notes. Hartford recently announced that it holds $259M in Fannie Mae (FNM) preferred stock and $252M in Freddie Mac (FRE) preferred stock. Hartford also reported that it is exposed to a combined $80M of Fannie and Freddie senior bonds through credit default swaps. Meanwhile, Credit Suisse on July 10 downgraded the insurer to Neutral from Outperform, citing the potential of a large DAC charge and limited growth. The firm slashed their target for Hartford Financial to $75 from $90.