Property and casualty insurer Tower Group International Ltd. (TWGP) was battered on Sept 18 after the company announced they would delay their second quarter earnings report for a second time as they continue to re-assess losses stemming from tropical Superstorm Sandy.
In the first delay of their earnings call, Tower Group had stated they needed more time to fully assess the “adverse reserve losses,” or unexpected simultaneous claims that occur after a major catastrophe, stemming from customer claims associated with Sandy. At the time, the company hinted that these unexpected losses could total as much as $110 million.
The company then promised the earnings report “within 30 days” while issuing the worrying guidance report. However, as 30 days came and went, it became clear the company had reneged on that promise. Finally, on Sept. 17, the company released a statement slating the release of the earnings for “during the week of October 7.”
The earnings report was originally supposed to be released to shareholders on Aug. 7.
Investors are quickly losing faith in Tower Group, and analysts have been getting increasingly bearish. Guggenheim initiated coverage with a “neutral” rating. FBR & Co. lowered Tower Group from outperform to market perform, and lowered their price target from, $22 to $17. And on Aug 30 Zacks downgraded the stock from “hold” to “sell.”
Since the first earnings delay a month ago, Tower Group has plummeted, losing over 50 percent of its value in six weeks. They lost 26.55 percent on the day to bottom out at $10.17 a share, their lowest price in eight years.