We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Progressive (PGR) Misses on Q2 Earnings as Expenses Rise
Read MoreHide Full Article
Progressive Corp.’s (PGR - Free Report) second-quarter 2016 earnings per share of 29 cents missed the Zacks Consensus Estimate by 9.4%. Earnings were down 46% year over year as higher expenses offset the increase in revenues.
Including net realized losses, net income per share was 33 cents, down 47% year over year.
Progressive recorded net premiums written of $5.9 billion in the quarter under review, up 13% from $5.2 billion in the year-ago quarter. Net premiums earned were about $5.6 billion, up 11% year over year from $5.0 billion.
Net realized gains on securities in the quarter were $32.3 million, down 58% year over year. Combined ratio − the percentage of premiums paid out as claims and expenses − deteriorated 430 basis points (bps) from the prior-year quarter to 96.8%.
Total revenue came in at $1.8 billion. Revenues improved 12% year over year on a 12% increase each in premium, fees and service revenues. However, a decline of 2% in investment income was a partial dampener.
Total expense increased 12.9% to $1.7 billion. The major contributors to the rise were 23% higher other underwriting expense, an 11.9% increase in losses and loss adjustment expenses, and a 7.7% increase in policy acquisition costs.
In Jun 2016, policies in force were healthy with the Personal Auto segment increasing 8% from Jun 2015 to 10 million. Special Lines increased 3% from the prior-year month to 4.3 million.
In Progressive's Personal Auto segment, Direct Auto grew 11% year over year to 5.3 million. Agency Auto increased 4% from the comparable year-ago month to 4.9 million.
Progressive’s Commercial Auto segment increased 11% year over year to 0.6 million. The Property business had about 1.2 million policies in force in the reported month, up 12% year over year.
Progressive reported book value per share of $13.47 on Jun 30, 2016, up 7.2% from $12.26 on Jun 30, 2015.
Return on equity on a trailing 12-month basis was 14.8%, which deteriorated 200 bps from 16.8% in Jun 2015. However, the debt-to-total capital ratio improved 170 bps year over year to 25.4% as of Jun 30, 2016.
Zacks Rank and Other Stocks to Consider
Progressive carries a Zacks Rank #3 (Hold). Some better-ranked property and casualty insurers are MS&AD Insurance Group Holdings, Inc. (MSADY - Free Report) , Third Point Reinsurance Ltd and Argo Group International Holdings, Ltd . While MS&AD Insurance Group and Third Point Reinsurance sport a Zacks Rank #1 (Strong Buy), Argo Group International carries a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Progressive (PGR) Misses on Q2 Earnings as Expenses Rise
Progressive Corp.’s (PGR - Free Report) second-quarter 2016 earnings per share of 29 cents missed the Zacks Consensus Estimate by 9.4%. Earnings were down 46% year over year as higher expenses offset the increase in revenues.
Including net realized losses, net income per share was 33 cents, down 47% year over year.
Progressive recorded net premiums written of $5.9 billion in the quarter under review, up 13% from $5.2 billion in the year-ago quarter. Net premiums earned were about $5.6 billion, up 11% year over year from $5.0 billion.
Net realized gains on securities in the quarter were $32.3 million, down 58% year over year. Combined ratio − the percentage of premiums paid out as claims and expenses − deteriorated 430 basis points (bps) from the prior-year quarter to 96.8%.
PROGRESSIVE COR Price, Consensus and EPS Surprise
PROGRESSIVE COR Price, Consensus and EPS Surprise | PROGRESSIVE COR Quote
Numbers in June
Total revenue came in at $1.8 billion. Revenues improved 12% year over year on a 12% increase each in premium, fees and service revenues. However, a decline of 2% in investment income was a partial dampener.
Total expense increased 12.9% to $1.7 billion. The major contributors to the rise were 23% higher other underwriting expense, an 11.9% increase in losses and loss adjustment expenses, and a 7.7% increase in policy acquisition costs.
In Jun 2016, policies in force were healthy with the Personal Auto segment increasing 8% from Jun 2015 to 10 million. Special Lines increased 3% from the prior-year month to 4.3 million.
In Progressive's Personal Auto segment, Direct Auto grew 11% year over year to 5.3 million. Agency Auto increased 4% from the comparable year-ago month to 4.9 million.
Progressive’s Commercial Auto segment increased 11% year over year to 0.6 million. The Property business had about 1.2 million policies in force in the reported month, up 12% year over year.
Progressive reported book value per share of $13.47 on Jun 30, 2016, up 7.2% from $12.26 on Jun 30, 2015.
Return on equity on a trailing 12-month basis was 14.8%, which deteriorated 200 bps from 16.8% in Jun 2015. However, the debt-to-total capital ratio improved 170 bps year over year to 25.4% as of Jun 30, 2016.
Zacks Rank and Other Stocks to Consider
Progressive carries a Zacks Rank #3 (Hold). Some better-ranked property and casualty insurers are MS&AD Insurance Group Holdings, Inc. (MSADY - Free Report) , Third Point Reinsurance Ltd and Argo Group International Holdings, Ltd . While MS&AD Insurance Group and Third Point Reinsurance sport a Zacks Rank #1 (Strong Buy), Argo Group International carries a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>