Conglomerate Loews Corp reported a lower-than-expected second-quarter profit on Monday, but higher operating income at its CNA commercial insurance business boosted its shares by 4 percent.

The New York-based company, run by the Tisch family, posted earnings from continuing operations of $341 million, or 78 cents a share, compared with a profit of $511 million, or $1.00 a share, in the same period a year ago.

Analysts were looking for a profit of 98 cents a share, excluding items, according to Reuters Estimates.

Loews shares gained, however, after its largest holding, Chicago-based CNA Financial Corp , said net operating income increased 22 percent to $305 million, compared to $250 million in the same period a year earlier.

Loews, which also has hotel and energy businesses, owns a 90 percent stake in the commercial insurer.

Shares in CNA climbed more than 9 percent although it reported investment losses hurt by the declining value of its mortgage-backed securities holdings amid falling home prices and rising unemployment.

Diamond Offshore Drilling , in which Loews has a 50.4 percent stake, is the second biggest contributor to Loews after CNA. Loews said the deepwater drilling contractor reported second quarter net income attributable to Loews of $181 million, down almost 7 percent from $194 million in the same period a year earlier.

Loews shares climbed about 4.3 percent or $1.28 cents at $31.30 and CNA shares soared just over 9 percent to $18.59 in morning trading on the New York Stock Exchange.

(Reporting by Anurag Kotoky in Bangalore and Elinor Comlay in New York; Editing by Ratul Ray Chaudhuri and Derek Caney)