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Progressive (PGR) July Earnings Fall As Expenses Increase
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Progressive Corp.’s (PGR - Free Report) operating earnings for Jul 2016 came in at 10 cents per share, down 44% from 18 cents earned in the year-ago month. Though revenues improved, a higher magnitude of expense increase weighed on the bottom line.
July Numbers
Progressive recorded $2.3 billion net premiums written, up 13% from $2 billion in the year-ago month. Net premiums earned of $2.2 billion soared 13% from the year-ago comparable period.
Combined ratio, deteriorated 420 basis points (bps) from the prior-year month to 97.3%.
In July, policies in force were healthy, with the Personal Auto segment increasing 8% year over year to 10.3 million. Special Lines rose 3% year over year to 4.3 million.
In Progressive's Personal Auto segment, Direct Auto improved 12% year over year to 5.3 million policies and Agency Auto increased 5% to nearly 5 million. Progressive’s Commercial Auto segment showed a 12% improvement to 0.6 million policies on a year-over-year basis. The Property business had about 1.8 million policies in force in the reported month, up 11% year over year.
Total revenue grew 18% year over year to $2.4 billion, largely driven by higher service revenues (up 9% year over year), fees revenues (up 12%), premiums (up 18%) and investment income (up 11%).
On the other hand, total expense increased 17.4% year over year to $2.4 billion in July. The major factors behind the rise in total expense were a 12.4% increase in policy acquisition costs, 6% higher other underwriting expenses, and a 20.3% increase in losses and loss-adjustment expenses.
Progressive reported book value per share of $13.76 on Jul 31, 2016, up 7.6% year over year.
Return on equity on a trailing 12-month basis was 15.2%, down 250 bps year over year. The debt-to-total capital ratio improved 170 bps from the prior-year level to 24.9% as of Jul 31.
Progressive carries a Zacks Rank #4 (Sell). Some better-ranked property and casualty insurers are National General Holdings Corp. (AWH - Free Report) , Argo Group International Holdings, Ltd. and National Interstate Corporation (NATL - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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Progressive (PGR) July Earnings Fall As Expenses Increase
Progressive Corp.’s (PGR - Free Report) operating earnings for Jul 2016 came in at 10 cents per share, down 44% from 18 cents earned in the year-ago month. Though revenues improved, a higher magnitude of expense increase weighed on the bottom line.
July Numbers
Progressive recorded $2.3 billion net premiums written, up 13% from $2 billion in the year-ago month. Net premiums earned of $2.2 billion soared 13% from the year-ago comparable period.
Combined ratio, deteriorated 420 basis points (bps) from the prior-year month to 97.3%.
In July, policies in force were healthy, with the Personal Auto segment increasing 8% year over year to 10.3 million. Special Lines rose 3% year over year to 4.3 million.
In Progressive's Personal Auto segment, Direct Auto improved 12% year over year to 5.3 million policies and Agency Auto increased 5% to nearly 5 million. Progressive’s Commercial Auto segment showed a 12% improvement to 0.6 million policies on a year-over-year basis. The Property business had about 1.8 million policies in force in the reported month, up 11% year over year.
Total revenue grew 18% year over year to $2.4 billion, largely driven by higher service revenues (up 9% year over year), fees revenues (up 12%), premiums (up 18%) and investment income (up 11%).
On the other hand, total expense increased 17.4% year over year to $2.4 billion in July. The major factors behind the rise in total expense were a 12.4% increase in policy acquisition costs, 6% higher other underwriting expenses, and a 20.3% increase in losses and loss-adjustment expenses.
Progressive reported book value per share of $13.76 on Jul 31, 2016, up 7.6% year over year.
Return on equity on a trailing 12-month basis was 15.2%, down 250 bps year over year. The debt-to-total capital ratio improved 170 bps from the prior-year level to 24.9% as of Jul 31.
PROGRESSIVE COR Price
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Zacks Rank
Progressive carries a Zacks Rank #4 (Sell). Some better-ranked property and casualty insurers are National General Holdings Corp. (AWH - Free Report) , Argo Group International Holdings, Ltd. and National Interstate Corporation (NATL - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong 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 >>