Lincoln posts $579 million 1st-quarter loss

NEW YORK (Reuters) - Lincoln National Corp (LNC.N), one of the largest U.S. life insurers, said on Tuesday it posted a first-quarter loss, hurt by a large goodwill charge related to annuity business.

Philadelphia-based Lincoln said its net loss was $579 million, or $2.27 a share, compared with net earnings of $289 million, or $1.10 a share, in the year-earlier quarter.

The loss included a $600 million non-cash charge related to the impairment of goodwill in Lincoln's annuity business.

The company said it had also changed the features in some variable annuities, a popular retirement product it sells, reducing the risk of future losses.

U.S. life insurers have been weakened by the global financial crisis, hurt by investment losses, as well as higher costs on investment-linked retirement products that guarantee returns.

On an operating basis, Lincoln earned a profit of $171 million, or 66 cents a share, compared with $322 million, or $1.23 a share, a year ago.

Lincoln has been working for months to head off a cash drain, slashing its dividend 95 percent in February, and more recently reaching a reinsurance deal with Goldman Sachs that improves its capital position by about $240 million.

On Tuesday, the insurer said it was on track to cut costs by $250 million, before tax and other considerations, by the end of June.

The insurer has also recently paid down $600 million in debt, reducing financial leverage. It also plans to sell some assets.