REFILE-UPDATE 1-Fairfax Holdings profit misses estimates as investment losses rise

Thu Feb 18, 2016 6:36pm EST
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(Refiles to remove extraneous words in first paragraph)

Feb 18 (Reuters) - Fairfax Holdings reported a lower-than-expected quarterly profit, hurt by higher losses on its investments.

Net investment losses increased to $200.1 million in the fourth quarter from $172.6 million a year earlier.

The company, led by well-known contrarian investor Prem Watsa, maintained its defensive equity hedges on concerns about the global economic outlook.

Watsa, a devotee of the value investing style favored by Warren Buffett, made billions for Fairfax by correctly calling the 2008 financial crisis.

At the end of the quarter ended Dec. 31, equity hedges accounted for 88.1 percent of its equity holdings, the company said. It has since added about $938 million to its short positions in equity and equity index total return swaps.

Fairfax's net income rose to $133.1 million, or $4.10 per share, in the quarter, from $23.7 million, or 49 cents per share, a year earlier.

Analysts on average had expected earnings of $5.49 per share, according to Thomson Reuters I/B/E/S.

Net premiums written at rose 25.7 percent to $1.91 billion.

Up to Thursday's close of C$770.50, shares of the company had risen 17.3 percent in the current year, outperforming a marginal fall in the Toronto Stock Exchange. (Reporting by Narottam Medhora in Bengaluru; Editing by Saumyadeb Chakrabarty)