Ten days after announcing a first quarter profit of $1.4 million, Bermuda-based insurer Quanta Capital Holdings said yesterday its results would have to be restated to a $644,000 loss because of a ?calculation error?.

The development is not good news for the company, with its previously stated profit falling short of analyst expectations. Shareholder earnings of two cents per share fell far short of the 23 cents in profit per share that analysts predicted.

Now the gap between expectations and actual results has widened with investors swallowing a one cent per share loss.

Quanta ? one of the latest start-ups to get off the ground after a wave of insurers and reinsurers flooded into the Bermuda marketplace in response to a void in re/insurance capacity after the September 11, 2001 terrorist attacks ? failed to turn a profit last year, largely because of hurricane claims from a severe storm season in 2004.

Year on year its first quarter loss of $0.6 million compares to a loss a year ago of $4.5 million.

Quanta said yesterday that the change in its financial position for the first three months of the year resulted from a need to correct its policy acquisition expenses.

?Acquisition expenses are approximately $20.4 million as compared to reported acquisition expenses of approximately $18.4 million.?

Quanta said it discovered the calculation error during its routine monthly closing process for its books at the April month-end.

This was an isolated instance and only affects its financial statements in the last quarter and not prior periods, the company claimed (see revised 1Q report card)

Quanta said its previous earnings report from May 2 should no longer be relied on, and a new filing would be made as soon as possible.

CEO Tobey Russ had said of the company?s previously reported result that it represented ?another milestone for the company, as we have returned to profitability after experiencing an unprecedented amount of catastrophe losses during 2004.

Yesterday he called the need to restate its results ?unfortunate?.

?We understand the importance of transitioning from a manual spreadsheet environment to fully automated financial reporting systems as part of our growth as a young company and are continuing to dedicate resources to this effort,? he said.

Quanta also announced an investor event to be held in New York on May 26, ?to shed more light on our development as a company, including our operations and our business strategy and to provide, for the first-time in 2005, [financial guidance?.