Conseco To Cut 2000 Jobs
Insurer Also Posts Operating Loss
From Bloomberg News
CARMEL, Ind. (July 27) -- Conseco Inc. said it will cut 2000 jobs at its troubled finance unit, 11 percent of the company's total, to cut costs in new chief executive Gary Wendt's first moves to turn around the beleaguered insurer.
The Carmel, Indiana-based insurer, whose shares have fallen 48 percent this year, said it will close five business lines at Conseco Finance in an effort to slash costs by $150 million.
Conseco also reported an operating loss, which excludes realized capital gains, of $28.6 million, or 9 cents a share, versus profit from operations of $277.2 million a year ago.
The losses was driven by more than $304.7 million in charges tied a change in its senior management and write downs in its consumer-finance unit.
The quarterly loss was the first for Conseco since 1994. Analysts said it was not surprising given the special charges the company was obliged to take.
``The results were within our expectations though our expectations weren't all that high,'' said Larry G. Mayewski, a senior vice president at A.M. Best.
Conseco shares rose sharply prior to the earnings report, gaining 7/8 to 8 3/4. In after-hours trading, the shares climbed further to 9 3/8.
Jul/27/2000 17:09 ET
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