St. Paul Travelers' financial news sent the company's stock price up $2.20, or 5 percent, to close at $45.60 a share in heavy trading Tuesday.

Net income - the bottom line - nearly quintupled, to $1.01 billion, or $1.41 a share, in this year's first quarter. The $212 million, or 31 cents a share, of net income in the 2005 quarter reflected a $665 million hit, mostly from taxes, related to a decision to sell the company's stake in Nuveen Investments Inc.

Operating income, which excludes realized investment gains and losses and certain other items, rose 18 percent, to a record $1.01 billion, or $1.41 a share, in this year's quarter. Operating profits included an after-tax benefit of $49 million, or about 7 cents a share, from resolving federal and state tax matters from prior years.

Fishman said results reflect "strong operational execution in all three of our segments, as well as solid net investment income. Retention rates remain very strong, and we continue to write quality new business."

The first quarter also benefited from a 15 percent increase in net investment income, to $670 million after taxes, and no catastrophe weather claims, compared with $20 million in the 2005 quarter.

In addition, first-quarter profits got an after tax boost from the release of $32 million from prior periods' claim reserves, money not needed to pay claims. Last year's quarter included a $36 million after tax reserve release.

Tuesday's news was welcome after St. Paul Travelers' fourth-quarter 2005 net income had plunged 41 percent as the company added $830 million to reserves for asbestos claims.

This year's first quarter "was a strong quarter for St. Paul Travelers, which, combined with capital management initiatives and increased earnings guidance, should significantly lessen the distaste left in investors' palates from last year's fourth-quarter asbestos charge," Larry Greenberg, co-manager of Langen McAlenney in Hartford, wrote to clients.

The "capital management" - use of excess capital - includes a 13 percent increase in the quarterly dividend, from 23 cents to 26 cents a share. The dividend is payable June 30 to shareholders of record as of the close of business on June 9.

The St. Paul Travelers board has also authorized the buyback of as much as $2 billion of the company's stock in a program that is expected to start this month and end in early 2008, Fishman said.

The company raised its guidance Tuesday on full-year operating earnings by about 30 cents, to a range of $4.70 to $5 a share. The forecast does not include any provision for reserve releases or boosts, but does include an assumption of $300 million after tax for catastrophe claims for the rest of the year.

Fishman said the company is positioned well to grow profitably, and told analysts, "Contrary to recent market speculation, we do not need acquisitions to either grow or improve our franchise. We are not currently active in this regard and have not been since the merger" in 2004 that formed the company.

The Wall Street Journal reported in March that St. Paul Travelers was in early discussions to buy the Swiss company Zurich Financial Services. But a few days later, Travelers denied it was in any such talks.

In its earnings report Tuesday, St. Paul Travelers said first-quarter net written premiums were up 1 percent, to $4.77 billion, from a year earlier, excluding commercial operations that are in runoff.

Travelers' main commercial insurance segment posted $535 million of operating income in the first quarter, compared with $448 million in the 2005 quarter.

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