Alexander & Alexander Services Inc., the world's second-largest insurance broker, finished a painful year of restructuring with a loss of $111.3 million in the fourth quarter, the company announced yesterday.
The loss, which amounted to $2.66 a share after the payment of preferred stock dividends, included pre-tax charges that totaled million in the quarter. The charges covered the costs of real estate consolidations, about 1,100 layoffs and various litigation settlements involving former subsidiaries.
In the 1993 fourth quarter, Alexander earned $3.2 million, or 3 cents a share, after paying preferred stock dividends.
Revenue in the latest quarter fell about 4 percent, to $333.2 million from $347.8 million a year ago.
The results were no surprise to observers of the New York company, which employs about 500 people at its administrative headquarters in Owings Mills and another 280 or so at its Baltimore sales office. Chairman and Chief Executive Officer Frank G. Zarb, hired in June, had been careful to warn investors about the coming loss.
"During the second half of 1994, we did what we set out to do: lay the foundation for improved perform ance," Mr. Zarb said in a statement yesterday. "Now we are going to concentrate on growing our business."
The restructuring followed years of substandard performance and losses at Alexander. Last summer, Alexander secured a $200 million investment from insurer American International Group Inc., moved to stem further liability losses in its British unit and hired Mr. Zarb, former chairman of securities firm Smith Barney.
Among his moves: 1,100 layoffs around the world, the sale of several subsidiaries and legal settlements that put to rest outstanding claims against companies that Alexander sold years ago.
For the full year, Alexander lost $138.7 million, or $3.51 per share. In 1993, the company managed to post a $27 million profit, after several years of big losses.
The chairman apparently reassured analysts in a phone call yesterday. "I think most of us were encouraged by what Frank Zarb and [President] Ed Kosnik said in the conference call about what they can achieve in 1995," said Joanne A. Smith, analyst at Fox-Smith, Kelton Inc. in New York.