21st Century Holdings’ stock sinks on lower Q1 earnings, revised ’07 guidance
Investors reacted swiftly and decisively late today to 21st Century Holding Co.’s (Nasdaq: TCHC) reporting a significantly lower first quarter earnings and lowering its guidance for 2007.
Shares plunged in after-hours trading -- by $8.69, or 43.5%, to $11.30 as of 6:17 pm ET. The stock has traded between $12.19 (on July 24) and $33.75 (on Oct. 26) in the past year.
Volume was heavy, with more than 340,000 shares changing hands, compared with an average three-month daily volume of 87,080 shares.
For the quarter ended March 31, the Lauderdale Lakes, Fla.-based insurance carrier posted net income of $842,805, or $0.11 per share, on revenue of $25.6 million, compared with net income of $6 million, or $0.88 per share, on revenue of $25.1 million in the year-ago period.
21st Century also amended its 2007 guidance to $2.00 to $2.50 per share, from $4.50 per share.
The firm cited several factors for lowering its guidance, including the belief that “the State of Florida has politicized the entire rate making process.”
The company also blamed the state’s insurance carrier, Citizens Property Insurance Corp., for its revised outlook. It said the carrier is “using rates that do not take into consideration the cost of private reinsurance and income tax expense while at the same time attracting new business since they are no longer considered the carrier of last resort, thereby hurting us in our ability to compete in a free enterprise system.”
21st Century underwrites general liability insurance, homeowners' property and casualty insurance, flood insurance and personal automobile insurance in Florida. It also underwrites general liability coverage as an admitted carrier in the states of Louisiana, Texas and Alabama for more than 300 classes of business.
