EMC Insurance Group (EMCI) Guides Lower for Q2 and FY

July 3, 2008 10:45 AM EDT

EMC Insurance Group Inc. (Nasdaq: EMCI) announced that as a result of a record amount of Midwest storm losses during the second quarter, including the devastating tornado in Parkersburg, Iowa, management has revised its 2008 operating income guidance to a range of $1.20 to $1.45 per share from the previous range of $2.10 to $2.35 per share. (Consensus is $2.19)

Management anticipates that catastrophe and storm losses for the second quarter of 2008 will range from $1.09 per share to $1.17 per share after tax, compared to $0.46 per share after tax for the second quarter of 2007. (Consensus is $0.54)

For the first six months of 2008, catastrophe and storm losses are anticipated to range from $1.35 per share to $1.43 per share after tax, compared to $0.58 per share after tax for the first six months of 2007. Assuming normal storm activity for the remainder of 2008, management is now projecting that catastrophe and storms losses for calendar year 2008 will approximate 11.0% of earned premiums, compared to the previous assumption of 6.9% of earned premiums.

"The Midwest has been hit by an unusually large number of severe storms this spring," said Bruce G. Kelley, President and CEO. "The record level of storm losses we experienced during the second quarter is not due to a concentration of exposures, but rather the shear number of severe storms that struck the Midwest. The devastation is widespread and difficult to comprehend, but we are proud to be a part of the re-building process for our policyholders."[SM]

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