AFG: Tax benefit boosts 2003 results

A $136 million tax benefit from a corporate restructuring and a $36.7 million gain from the sale of its stake in the former auto-insurance business led American Financial Group Inc. to better 2003 results, the company said Thursday.

AFG said it earned $293.8 million, or $4.12 a common share, for the full year. In 2002, it earned $84.6 million, or $1.22 a share.

Excluding the one-time benefits, earnings from AFG's core insurance operations were $155.8 million, or $2.22 a share, down $10 million from 2002 because of a charge for an arbitration decision related to a 1995 claim.

Chairman and chief executive officer Carl Lindner said the company has reduced debt and increased its cash holdings and was comfortable with predictions of core earnings of $2.75 to $3 a share in 2004.

"We are optimistic about our ongoing prospects for growth and profitability," Lindner said.

Shares in AFG - the holding company for the financial interests of Lindner, the Cincinnati Reds owner - closed at $29.36, down 38 cents.

The company has tried to increase rates and dispose of less-profitable businesses during the last several years, with the moves apparently paying off in 2003.

The company said rate increases in 2004 would average 5 percent to 8 percent.

"We are committed to maintaining rate adequacy going forward and believe that pricing will remain firm in 2004," said Carl Lindner III, AFG's co-president.

For the fourth quarter, AFG earned $196.6 million, or $2.68 a share, more than four times earnings in the same period in 2002.

Shares of AFG closed at $29.36, down 38 cents.

Cliff Peale

Omnicare: Profits up in fourth-quarter 2003

Omnicare Inc. boosted fourth-quarter profits by 59 percent, compared with the same period in 2002, and saw its annual net income increase by 54 percent as the Covington-based pharmacy management company continued to capitalize on recent acquisitions and solidify its position as the market leader.

For fourth-quarter 2003, the company reported profits of $61.6 million, or 59 cents a share, up from $38.7 million, or 41 cents a share, in fourth quarter 2002.

For the year, Omnicare reported net profits of $194.4 million, or $1.93 a share, up from $125.9 million, or $1.33 a share, in 2002.

The quarterly results met the expectations of analysts surveyed by Nelson Information/Thomson Financial, while the yearly results were below the $2 a share that analysts predicted.

Omnicare's stock closed at $44.09, up 40 cents on the day.

The company also saw revenues skyrocket: Fourth-quarter 2003 sales were $942 million, up from $670 million during the same period in 2002. Yearly sales were almost $3.5 billion, up from $2.6 billion in 2002.

Omnicare officials said the growth was directly tied to recent acquisitions of major competitors, including NCS HealthCare and SunScript.

The additions helped fuel a 30 percent jump in the size of Omnicare's pharmacy business. The company now offers pharmacy services in nursing homes and elderly care facilities with more than 1 million beds nationwide.

"As a result, we achieved our 14th consecutive quarter of sequential as well as year-over-year growth while diligently maintaining our financial strength," company president and chief executive officer Joel F. Gemunder said.

Gemunder also said more use of name-brand drugs and a strong flu season in the fourth quarter contributed to the results.

He also predicted earnings of $2.55-2.65 a share for 2004, saying the growth would start slowly in the first quarter and pick up as the year went on.

James Pilcher

Armor Holdings: Army demand narrows loss

The parent of Fairfield's O'Gara-Hess & Eisenhardt vehicle armoring business posted a narrower fourth-quarter loss, thanks in part to the Army's demand for armored Humvees.

For the three months ended Dec. 31, Jacksonville, Fla.-based Armor Holdings Inc. reported a net loss of $4.9 million, or 17 cents a share, down from a loss of $13 million, or 44 cents a share, in the year-ago period. Included in the latest quarter was a net loss of $7.1 million, or 24 cents a share, from discontinued operations, including the loss on the sale of ArmorGroup Services.

Last year, O'Gara, which has an exclusive contract to armor military Humvees built by AM General Corp., supplied 873 of the vehicles to the military and is ramping up to supply 2,300 this year.

O'Gara has doubled its employment to about 400 to handle the increased military demand.

O'Gara will be supplying 220 armored Humvees a month by May, and Armor executives said the company is prepared to double that rate in six months if the military requires it.

Fourth-quarter revenues for Armor's mobile security division, which includes O'Gara, increased 41 percent to $48.7 million.

Full-year revenue for Armor's mobile security division rose 26 percent to $157.5 million.

Armor's full-year earnings were $10.9 million, or 38 cents a share, compared with a loss of $17.7 million, or 57 cents a share, in the prior year.

Revenues for the year increased 20 percent to $365 million.

This year, Armor said it expects revenues of $620 million to $640 million and earnings of $1.50 to $1.60 a share.

Shares of Armor closed unchanged at $28.72 Thursday.

Mike Boyer

Midland: Net income increases 30 percent

Midland Co., the specialty insurance company in Amelia, reported a 30 percent increase in fourth-quarter net income Thursday.

The company posted a profit of $10 million, or 56 cents a share, for the three-month period ended Dec. 31, compared with $7.7 million, or 43 cents a share, in the same period in 2002. Fourth-quarter revenue rose 8.3 percent to $186 million, driven mostly by dwelling fire, mortgage fire, collateral protection and watercraft policies.

Midland shares shed 45 cents Thursday, closing at $23.55.

For the year, Midland posted net income of $23.3 million, or $1.30 a share, and revenue of $718.2 million, compared with net income of $18.8 million, or $1.06 a share, and revenue of $643.7 million in 2002.

James McNair