We are upgrading our recommendation on the shares of Loews Corp. (L) to Neutral. The company’s third-quarter earnings of $1.08 per share was well ahead of the Zacks Consensus Estimate of 87 cents a share. Loews reported a loss of 33 cents a share in the year-ago quarter.   The improved earnings were driven by increased investment income and a considerable reduction in investment losses at CNA Financial Corp. (CNA), besides strong results at Diamond Offshore Drilling Inc. (DO).    While the spin-off of Lorillard in 2008 eliminated the company’s overhang of tobacco litigation and the strong rebound in investment income is impressive, we think that the continuation of a stressed economic environment will have a restrictive effect on the top-line growth of the company.   The recent financial market appreciation bodes well for Loews. Both the holding company as well as the subsidiary, CNA, has experienced

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Loews Corporation’s (L) third quarter income from continuing operations came in at $1.08 per share compared to a loss of 33 cents in the year-ago quarter. Results primarily reflected a 26% year-over-year increase in revenues. The improved results were driven by increased investment income and a considerable reduction in investment losses at CNA Financial Corporation (CNA) and strong results at Diamond Offshore Drilling Inc. (DO). Also, the results reflect a strong rebound in investment income, primarily from improved limited partnership results. CNA Financial Corporation’s operating income increased to $304 million from $76 million in the prior-year period. Diamond Offshore experienced a strong quarter with $170 million of earnings, up 17% year-over-year. However, Boardwalk Pipeline Partners, LP’s (BWP) earnings decreased to $9 million from $31 million in the year-ago period. Reported earnings for the quarter were significantly reduced due to the shutting down ...

Houston-based Diamond Offshore Drilling Inc. (DO) on Monday sold $500 million of senior notes. These are 5.70% unsecured notes due on Oct. 15, 2039. The notes were offered at 99.344% of the principal amount. The company plans to utilize the net proceeds from the sale for general corporate purposes. The transaction is expected to close on Oct. 8, 2009. Diamond Offshore is a major contract driller, providing comprehensive offshore drilling services to the global energy industry. The company is leveraged to global deepwater markets through its fleet of high-specification and mid-water depth equipment. Last week, the company purchased a dynamically positioned semi-submersible offshore drilling unit (PetroRig II) for approximately $490 million. The rig was renamed Ocean Valor. The transaction is followed by the company’s acquisition of PetroRig I (renamed Ocean Courage) in June. Diamond's deepwater orientation and solid contract backlog offer a very high level ...

Loews Corporation’s (L) second quarter income from continuing operations came in at $0.78 per share, substantially short of the Zacks consensus estimate of $1.09. This compares to net income of $1.00 in the year-ago quarter.   The lower-than-expected results primarily reflect higher net investment losses partially offset by an increase in net investment income at CNA Financial Corporation and strong results at Diamond Offshore Drilling, Inc. However, the underwriting performance was impressive during the quarter. Also, the results reflect a strong rebound in investment income, primarily from improved limited partnership results.   Net income from continuing operations decreased 33.3% year over year to $341 million.  This includes after tax net investment losses of $178 million, compared to $64 million in the prior year quarter. Net investment losses in the reported quarter primarily resulted from other-than-temporary impairment losses recognized in CNA’s available-for-sale portfolio.   CNA Financial Corporation’s operating income increased

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On Monday March 9, barely three months ago, I strongly recommended buying Diamond Offshore (NYSE: DO) as part of Money Morning’s “Buy, Sell, or Hold” feature.  Both the stock and the Standard & Poor’s 500 Index had both hit 52-week lows the Friday before.  But oil had already bottomed three weeks prior, and the lax fiscal and monetary policies of governments around the world seemed almost certain to promote reflation.

Additionally, since the earlier oil bottom, Diamond Offshore stock had been outperforming the market.

Diamond not only had compelling fundamentals, it sported an incredibly high dividend yield, particularly if you combined both the regular and the special dividend payouts. That made the stock a compelling buy.

Not only has Diamond Offshore’s stock turned around since that early-March recommendation, the U.S. stock market as a whole turned around.

Making an investment at a market bottom is a rare opportunity. It

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At this point, it is good to look for the defensive plays that have been neglected in this upturn and for safe havens for investors taking profits from the recent run.  After looking long and hard, I came to General Mills Inc. (NYSE: GIS).

We have been raking in huge profits in all our cyclical and aggressive plays since we called the turnaround in Brazil last October 27:  Petroleo Brasileiro (NYSE: PBR) — known as Petrobras – Vale (NYSE: VALE), Apple Inc. (Nasdaq: AAPL), BHP Billiton Ltd. (NYSE: BHP), Research in Motion Ltd. (Nasdaq: RIMM), IBM (NYSE: IBM), Amazon.com Inc. (Nasdaq: AMZN),  Diamond Offshore Drilling Inc. (NYSE: DO), and Ciena Corp. (Nasdaq: CIEN) have all done splendid.

And over the longer term, all of these companies are going to continue

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We highlight Weatherford International Ltd. (WFT), Ensco International, Inc. (ESV), Exxon Mobil Corp. (XOM), Schlumberger Ltd. (SLB) and Diamond Offshore Drilling, Inc. (DO).In its weekly status report today, the Energy Information Administration (EIA) reported a greater-than-expected drawdown in crude oil and gasoline inventories. Despite the weekly drawdown, crude oil inventory levels remain close to their highest level since 1990.The demand picture also remains very weak. Total refined products supplied over the last four-week period, a proxy for overall petroleum demand, was down 7.6% from the year-earlier period, with gasoline down 1.2%, distillates (includes diesel) down 12%, and jet fuel down 9%.The market has been looking beyond these weak near-term fundamentals, taking solace from the growing optimism about the economic landscape. Our view has been that oil should be able to hold on to its recent gains and consolidate around ...

Loews Corp. (L), a Zacks #5 Rank ("Strong Sell") stock, announced a first-quarter loss of $1.49 per share today, compared to the reduced consensus estimate for a 75-cent profit.

Total revenues slipped 16% to $3.02 billion, primarily due to an 8% decline in insurance premiums coupled with higher investment losses suffered by subsidiary CNA Financial Corp. (CNA).

The decline in Loews' revenue was partially offset by an 11% year-over-year growth in contract drilling revenues reported by another subsidiary, Diamond Offshore Drilling Inc. (DO).

The full-year consensus estimate has moved lower by 64 cents over the past 60 days to $4.19 per share.

L is up about 5% today on volume of approximately 1.8 million, compared to average volume of about 3.6 million.

"L" Free Stock Analysis: Buy? Sell? Hold?Zacks Investment Research

For Immediate Release

Chicago, IL - April 27, 2009 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Diamond Offshore Drilling, Inc. (DO), Marriott International (MAR), BJ's Restaurants Inc. (BJRI), News Corporation (NWS) and CEMIG (CIG).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=4579.

Here are highlights from Friday's Analyst Blog:

Diamond Offshore Glitters

Deepwater drilling powerhouse Diamond Offshore Drilling, Inc. (DO) reported better-than-expected first-quarter earnings and announced another special dividend. We see few signs of the downturn in oilfield activity levels in Diamond's quarterly report -- a trend that we see continuing for many quarters to come.

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Highlights include Schlumberger, Ltd. (SLB), Halliburton Co. (HAL) and Diamond Offshore Drilling, Inc. (DO).Oilfield service giant Schlumberger, Ltd. (SLB) reported first-quarter earnings this morning that were inline with our above-consensus estimate and provided an overall outlook of continued weakness through the rest of 2009.Margins help up better than expected, with international resilience offsetting North American softness. Given its benchmark status, Schlumberger's results and its dour outlook sets the stage for the rest of the oilfield service group. Contrary to Halliburton's (HAL) view of a near-term stabilization in the onshore U.S. drilling scene, Schlumberger does not expect a recovery before the middle of 2010.In the international markets, while the extent of declines has been limited, customers are reportedly seeking and getting price relief. They see deepwater market holding better than any other segment through this downturn. Schlumberger's favorable deepwater outlook ...