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Is The Hartford Financial (HIG) Poised to Beat Earnings Estimates?

BRK.B HIG FFG VOYA

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The Hartford Financial Services Group, Inc. (HIG - Analyst Report) is set to report fourth-quarter 2013 results on Feb 3, 2014. Last quarter, it posted a 24.1% surprise. Let’s see how things are shaping up for this announcement.

Growth Factors this Past Quarter

Hartford Financial has been enhancing its operational efficiency through successful divestitures. In Dec 2013 Hartford Financial vended its U.K. Variable Annuity Business to Berkshire Hathaway Inc. (BRK.B - Analyst Report) to reduce risks in its Talcott Resolution segment. Further, Hartford Financial’s refinancing options should reduce borrowing costs and enhance capital structure, thereby enhancing investor confidence. Moreover, the recent launch of a small commercial training program to train its agency professionals aims at gaining more customers. However, low policy retention and net investment income yield, and certain provisions of the Affordable Care Act might dampen the results of Hartford Financial to some extent.

Earnings Whispers?

Our proven model does not conclusively show that Hartford Financial is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zero Zacks ESP:  That is because the Most Accurate estimate and the Zacks Consensus Estimate both stand at 90 cents, making the difference 0.00%.

Zacks Rank #3 (Hold): Hartford Financial’s Zacks Rank #3 increases the predictive power of ESP, but when combined with a 0.00% ESP, it makes surprise prediction difficult. We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions .

Stocks to Consider

Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:  

FBL Financial Group Inc. (FFG - Snapshot Report), Earnings ESP of +4.49% and Zacks Rank #1 (Strong Buy).

ING U.S. Inc. (VOYA - Snapshot Report) with Earnings ESP of +2.94% and Zacks Rank #2 (Buy).

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