Harleysville Comments on Expected Drop in Q2 Operating Earnings

Harleysville Group Inc. announced that, based on loss activity through May 31, 2003, it expects 2003 second quarter earnings to be lower than in the same period of 2002.

It expects diluted operating earnings per share to be in the range of $0.32 to $0.40, compared to $0.46 last year. It explained that “current accident year losses were impacted in April and May by catastrophes and other weather-related losses, as well as large property losses.”

It also indicated that “diluted net income per share, which includes the impact of net realized after-tax investment gains and losses, is also expected to be in the range of $0.32 to $0.40 in the second quarter of 2003, assuming no significant realized net gains or losses,” Harleysville’s net income was $0.01 per share in the second quarter of 2002, “which reflected realized investment losses of $0.45 per share, mostly due to the write down of securities in the company’s investment portfolio.”

The company also said that it intends to “evaluate its results for the first six months after the completion of the second quarter and issue revised 2003 guidance when it releases second quarter 2003 earnings results on Friday, July 25.” It had earlier estimated 2003 diluted operating earnings per share would be between $1.45 to $1.55.

The bulletin said, however, that, “based on information currently available to the company, the company has no reason at this time to revise its prior expectations for the second half of 2003. It will host a live Webcast, available from the Investors section of the company’s Web site: (www.harleysvillegroup.com), beginning at 9:00 a.m. (ET) on July 25 to discuss its results.