Last week NZ-based insurer and funds manager Tower said its full-year operating profit will be as much as 75% higher than last year’s. All well and good, but it appears investors expected even more.

They’ve ignored the good news and taken note of Tower’s prediction that earnings on its NZ insurance business will drop by $NZ8 million ($7.4 million).

Tower says its core operating profit will be between $NZ40 million and $NZ43 million – about 25% below analysts’ forecasts.

With the profit announcement due on November 24, the group’s share price dropped by more than 11% last week.

CEO Jim Minto says service problems with the New Zealand business have been addressed. 

The embattled company has recovered from last year’s tailspin, with the group’s Australian wealth management business – which it spun off – showing improvement.

The company’s full-year results will be announced on November 24.