Indianpolis-based Conseco Inc. reported a 24 percent drop in quarterly income Thursday, hours after the life and health insurer said its chief executive was resigning.
It was reported last week that Conseco President and CEO William S. Kirsch will leave the company on May 23 after less than two years at the helm. James E. Hohmann, the company’s former chief administrative officer, will take over as interim CEO until a permanent replacement is found.
The news sent Conseco shares tumbling nearly 6 percent.
In the first quarter, Conseco had net income of $55.1 million, or 35 cents per share, down from $72.3 million, or 44 cents a share in the same period last year.
Excluding one-time items, Conseco earned $55.8 million, or 36 cents, compared to $70.3 million, or 43 cents, in the first quarter of 2005.
The results were 10 cents per share below the forecast of analysts surveyed by Thomson Financial.
The results included an after-tax impact of 5 cents to boost litigation reserves for a lawsuit settlement, according to the company, based in the Indianapolis suburb of Carmel. Conseco spokesman Tony Zehnder declined to comment on specific litigation.
Conseco also cited a decline in Medicare supplement business and higher benefit payouts for hampering profits.
In a statement, Kirsch said he planned to spend more time with his family and explore other opportunities. Zehnder said there was no connection between Kirsch’s resignation and the quarterly results.
Conseco shares fell $1.48, or 5.8 percent, to close at $23.90 after dropping as low as $21.91 at one point Thursday on the New York Stock Exchange. The shares have traded between $19.22 and $25.95 over the past year.
Kirsch, 49, left a position as a managing partner with the Chicago-based Kirkland & Ellis law firm to join Conseco in August 2004. In a statement, he said he was “very proud of the Conseco team and what we have achieved in turning the company around over the past two years.”
Conseco filed for bankruptcy protection in December 2002, when its plans to expand from insurance into a range of financial services collapsed under a mountain of debt. Conseco emerged from Chapter 11 protection in September 2003. At the time, it was the one of the nation’s largest bankruptcies.
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