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Multi Line Insurance Q3 Earnings on Nov 2: AIG, MET, PRU
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The Q3 earnings season is in full swing with 58.2% of the S&P 500 Index members having reported their quarterly results so far. According to our latest Earnings Preview report, the performance of the 291 index members (accounting for 68.5% of the index’s total market capitalization) that have already reported their financial numbers this quarter indicate that total earnings have improved 2.2% on 1.3% higher revenues, on a year-over-year basis. The beat ratio is also strong with 73.5% companies surpassing bottom-line expectations and 57.4% outperforming on the top-line front.
The Finance sector (one of the 16 Zacks sectors) has started the Q3 earnings season on a strong note. In fact, the financial performance of 78.9% companies from this sector that have already reported their quarterly results indicates 9.3% earnings growth due to a 5.9% increase in revenues, on a year-over-year basis. Moreover, the beat ratios of 74.6% for the bottom line and 73.2% for the top line compare favorably with the S&P 500.
The Finance sector is highly diversified and includes several industries like insurance, banks and securities exchanges to name a few.
Amid a benign catastrophe environment in Q3, underwriting results improved. Lesser cat events favored capital gains and reserve release, pressurizing pricing. Better payroll and employment scenario should also benefit insurers. Insurers are poised to outperform in the quarter on the back of their core business, geographic expansion and strategic acquisitions. Companies that are skewed toward providing health benefits may gain from expansion of the Affordable Care Act, while improvement in the housing market should benefit mortgage insurers.
However, a soft interest rate environment continued to weigh on investment results. Nonetheless, spread compression on products like fixed annuities and universal life should improve.
As many as 1085 companies, including 130 index members, are due to report their results this week. Let’s take a look at how these three multiline insurers might fare when they report their Q3 numbers on Nov 2.
MetLife Inc (MET - Free Report) is a leading provider of insurance and financial services to a broad spectrum of individual and institutional customers. The company delivered a negative earnings surprise of 38.97% in the last quarter. According to our quantitative model, a company needs the right combination of two key ingredients – a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) – to increase its odds of an earnings surprise. MetLife’s favorable Zacks Rank #3 and an Earnings ESP of +1.71 makes us confident of an earnings beat. Please check our Earnings ESP Filter that enables you find stocks that are expected to come out with earnings surprises..
Property and casualty segment might see improved results from auto insurance as a result of rate increases. Also, global expansion through acquisitions and strategic alliances along with a diversified portfolio and prudent underwriting will support earnings. Expense management initiatives and pricing and underwriting actions in auto should support earnings. However, foreign exchange, volatile equity markets and low interest rates are likely dampeners. (Read more: Is MetLife Well Poised for an Earnings Beat in Q3? )
With respect to the surprise trend, MetLife missed expectations in all of the last four quarters with an average miss of 28.03%. The Zacks Consensus Estimate for Q3 is pegged at $1.17 per share.
American International Group Inc. (AIG - Free Report) is a holding company, which through its subsidiaries, is engaged in a range of global insurance and insurance-related activities. The company delivered a positive earnings surprise of 19.64% in the last quarter. American International’s favorable Zacks Rank #3 and an Earnings ESP of 0.00% prediction difficult.
Net premiums written might decrease in Commercial insurance while sales of variable annuity – given the uncertainty surrounding the Department of Labor rules and market volatility – are expected to lower. Also, annuity business is expected to show a decline in volumes as the company is frequently reevaluating its products to meet its return targets. However, Personal Insurance is expected to benefit from strategic actions undertaken to reduce expenses. (Read more: American International Q3 Earnings: What's in Store?)
With respect to the surprise trend, American International missed expectations in three the last four quarters with an average miss of 24.06%. The Zacks Consensus Estimate for Q3 is pegged at $1.21 per share.
Prudential Financial Inc. (PRU - Free Report) offers an array of financial products and services including life insurance, annuities, retirement-related services, mutual funds, investment management and real estate services. The company delivered a negative earnings surprise of 26.10% in the last quarter. Prudential has a favorable Zacks Rank #2 but an Earnings ESP of 0.00% complicates our surprise prediction. You can see the complete list of today’s Zacks Rank #1 stocks here..
Prudential’s sales and flows across its domestic and international businesses are likely have improved in the quarter. Asset Management is likely to reported strong earnings and robust net inflows. However, higher expenses and low interest rate environment are likely to be the dampeners. (Read more: Prudential Financial Q3 Earnings: A Surprise in Store?)
With respect to the surprise trend, Prudential missed expectations in all the last four quarters with an average miss of 12.57%. The Zacks Consensus Estimate for Q3 is pegged at $2.50 per share.
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Multi Line Insurance Q3 Earnings on Nov 2: AIG, MET, PRU
The Q3 earnings season is in full swing with 58.2% of the S&P 500 Index members having reported their quarterly results so far. According to our latest Earnings Preview report, the performance of the 291 index members (accounting for 68.5% of the index’s total market capitalization) that have already reported their financial numbers this quarter indicate that total earnings have improved 2.2% on 1.3% higher revenues, on a year-over-year basis. The beat ratio is also strong with 73.5% companies surpassing bottom-line expectations and 57.4% outperforming on the top-line front.
The Finance sector (one of the 16 Zacks sectors) has started the Q3 earnings season on a strong note. In fact, the financial performance of 78.9% companies from this sector that have already reported their quarterly results indicates 9.3% earnings growth due to a 5.9% increase in revenues, on a year-over-year basis. Moreover, the beat ratios of 74.6% for the bottom line and 73.2% for the top line compare favorably with the S&P 500.
The Finance sector is highly diversified and includes several industries like insurance, banks and securities exchanges to name a few.
Amid a benign catastrophe environment in Q3, underwriting results improved. Lesser cat events favored capital gains and reserve release, pressurizing pricing. Better payroll and employment scenario should also benefit insurers. Insurers are poised to outperform in the quarter on the back of their core business, geographic expansion and strategic acquisitions. Companies that are skewed toward providing health benefits may gain from expansion of the Affordable Care Act, while improvement in the housing market should benefit mortgage insurers.
However, a soft interest rate environment continued to weigh on investment results. Nonetheless, spread compression on products like fixed annuities and universal life should improve.
Insurance - Multi line Industry Price Index
Insurance - Multi line Industry Price Index
As many as 1085 companies, including 130 index members, are due to report their results this week. Let’s take a look at how these three multiline insurers might fare when they report their Q3 numbers on Nov 2.
MetLife Inc (MET - Free Report) is a leading provider of insurance and financial services to a broad spectrum of individual and institutional customers. The company delivered a negative earnings surprise of 38.97% in the last quarter. According to our quantitative model, a company needs the right combination of two key ingredients – a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) – to increase its odds of an earnings surprise. MetLife’s favorable Zacks Rank #3 and an Earnings ESP of +1.71 makes us confident of an earnings beat. Please check our Earnings ESP Filter that enables you find stocks that are expected to come out with earnings surprises..
Property and casualty segment might see improved results from auto insurance as a result of rate increases. Also, global expansion through acquisitions and strategic alliances along with a diversified portfolio and prudent underwriting will support earnings. Expense management initiatives and pricing and underwriting actions in auto should support earnings. However, foreign exchange, volatile equity markets and low interest rates are likely dampeners. (Read more: Is MetLife Well Poised for an Earnings Beat in Q3? )
With respect to the surprise trend, MetLife missed expectations in all of the last four quarters with an average miss of 28.03%. The Zacks Consensus Estimate for Q3 is pegged at $1.17 per share.
METLIFE INC Price and EPS Surprise
METLIFE INC Price and EPS Surprise | METLIFE INC Quote
American International Group Inc. (AIG - Free Report) is a holding company, which through its subsidiaries, is engaged in a range of global insurance and insurance-related activities. The company delivered a positive earnings surprise of 19.64% in the last quarter. American International’s favorable Zacks Rank #3 and an Earnings ESP of 0.00% prediction difficult.
Net premiums written might decrease in Commercial insurance while sales of variable annuity – given the uncertainty surrounding the Department of Labor rules and market volatility – are expected to lower. Also, annuity business is expected to show a decline in volumes as the company is frequently reevaluating its products to meet its return targets. However, Personal Insurance is expected to benefit from strategic actions undertaken to reduce expenses. (Read more: American International Q3 Earnings: What's in Store?)
With respect to the surprise trend, American International missed expectations in three the last four quarters with an average miss of 24.06%. The Zacks Consensus Estimate for Q3 is pegged at $1.21 per share.
AMER INTL GRP Price and EPS Surprise
AMER INTL GRP Price and EPS Surprise | AMER INTL GRP Quote
Prudential Financial Inc. (PRU - Free Report) offers an array of financial products and services including life insurance, annuities, retirement-related services, mutual funds, investment management and real estate services. The company delivered a negative earnings surprise of 26.10% in the last quarter. Prudential has a favorable Zacks Rank #2 but an Earnings ESP of 0.00% complicates our surprise prediction. You can see the complete list of today’s Zacks Rank #1 stocks here..
Prudential’s sales and flows across its domestic and international businesses are likely have improved in the quarter. Asset Management is likely to reported strong earnings and robust net inflows. However, higher expenses and low interest rate environment are likely to be the dampeners. (Read more: Prudential Financial Q3 Earnings: A Surprise in Store?)
With respect to the surprise trend, Prudential missed expectations in all the last four quarters with an average miss of 12.57%. The Zacks Consensus Estimate for Q3 is pegged at $2.50 per share.
PRUDENTIAL FINL Price and EPS Surprise
PRUDENTIAL FINL Price and EPS Surprise | PRUDENTIAL FINL Quote
Now See Our Private Investment Ideas
While the above ideas are being shared with the public, other trades are hidden from everyone but selected members. Would you like to peek behind the curtain and view them? Starting today, for the next month, you can follow all Zacks' private buys and sells in real time from value to momentum . . . from stocks under $10 to ETF and option moves . . . from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trades