XL Capital Ltd., which has major operations in Hartford, reported its fourth-quarter loss widened as it recorded more than $1 billion in impairment charges.
Reacting to an expected slowdown in business, the Bermuda-based business insurer plans to shed 10 percent of its work force.
XL, whose name is on downtown Hartford’s sports arena, also will slash its quarterly dividend to 10 cents a share, about 47 percent lower than the 19-cent payout made in December.
XL Capital lost $1.43 billion, or $4.36 per share, during the quarter ended Dec. 31, compared with a loss of $1.22 billion, or $6.88 per share, during the same quarter a year earlier. The loss per share shrank despite an increase in the overall quarterly loss because XL Capital had more shares outstanding during the most recent quarter.
The fourth-quarter loss includes a $990 million noncash charge for impairment of goodwill and $608.5 million in other impairment charges, including a restructuring of the company’s investment portfolio. XL Capital also lost $214.2 million from investment fund affiliates during the quarter.
The goodwill charge was primarily related to XL Capital’s 1998 acquisition of MidOcean Ltd.
Operating income for the fourth quarter, which excludes special goodwill and impairment charges, grew to $189.5 million, or 58 cents per share, from $98 million, or 55 cents per share, during the final quarter in 2007.
It was the second time in less than a year XL Capital has cut its dividend. Last year, it halved its dividend from 38 cents. XL will pay out its quarterly dividend on March 31 to shareholders of record on March 13.
At 11 a.m., XL Capital traded at $3.64, up 74 cents, or 25.5 percent. (AP)
