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What's in Store for The Hartford (HIG) this Earnings Season?

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The Hartford Financial Services Group, Inc. (HIG - Free Report) will release first-quarter 2017 financial results on Apr 27, after the closing bell. Last quarter, the company delivered a positive earnings surprise of 12.50%.

Let’s see how things are shaping up for this announcement.

Factors Influencing this Past Quarter

We expect the Group Benefit segment to deliver a solid performance in the first quarter. A better product suite due to the addition of dental and vision services for the small case market as well as new voluntary offerings should support the upside.

Management expects Talcott Resolution to have performed well in the quarter. The unit is estimated to return $600 million of capital in 2017.

Its Personal Lines segment is expected to deliver a strong performance, continuing the trend displayed previously. The performance in the business should be boosted by prior-year reserves and current accident year loss picks.

The company has also invested in products, distribution, data and analytics, as well as digital capabilities to provide more value to its agents and customers. This, in turn, helped in customer acquisition and retention, which is likely to have resulted in higher revenues.

The company’s also enhanced shareholders’ value during the quarter through share repurchases. This is expected to positively impact the bottom line by limiting the outstanding share count.

However, higher auto loss costs are expected to have adversely affected the bottom line.

Combined ratio is likely to have deteriorated further continuing the previous quarters’ trend.

Earnings Whispers

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

Zacks ESP: The Hartford has an Earnings ESP of -0.97%. This is because the Most Accurate estimate is pegged at $1.02 and the Zacks Consensus Estimate stands at $1.03. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The Hartford Financial Services Group, Inc.  Price and EPS Surprise

 

Zacks Rank: The Hartford has a Zacks Rank #3. Though a favorable Zacks Rank increases the predictive power of ESP, we need a positive Earnings ESP to be confident about an earnings beat.

Please note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some other companies from the Multi line insurance space that you may want to consider as these have the right combination of elements to post an earnings beat this quarter

American International Group, Inc. (AIG - Free Report) , which is slated to report first-quarter earnings on May 3, has an Earnings ESP of +0.90% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

MetLife Inc. (MET - Free Report) has an Earnings ESP of +0.78% and a Zacks Rank #3. The company is set to report first-quarter earnings on May 3.

Prudential Financial, Inc. (PRU - Free Report) has an Earnings ESP of +0.38% and a Zacks Rank #2. The company is likely to report first-quarter earnings on May 3.

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