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Allstate Corporation’s (ALL - Free Report) first-quarter 2017 operating earnings per share of $1.64 beat the Zacks Consensus Estimate of $1.04. Earnings also soared 95% year over year on higher revenues.
Allstate generated total revenue of $9.4 billion in the first quarter. The top line surpassed the Zacks Consensus Estimate by 13.2% and also improved 6.3% year over year. The upside was driven by premium growth as well as a decent increase in net investment income.
In the first quarter, operating expenses increased 11.7% year over year to $1.1 billion.
Segments Results:
Property-liability: Insurance premiums amounted $7.7 billion in the first quarter, up 2.7% year over year. Net income of $652 million skyrocketed 193% year over year on the back of a lower loss ratio. The underlying combined ratio of 93.6% improved 480 basis points (bps) over the last-year quarter due to increased expense ratio. The segment recorded catastrophe losses of $781 million, down 5.6% year over year.
Allstate Financial: Premium and contract charges of $593 million grew 4.7% year over year. Operating income of $1130 million was 5.8% higher than the prior-year quarter due to better investment results at Allstate Annuities.
Corporate and Others: Revenues generated primarily from net investment income totaled $11 million, up 10% year over year.Operating loss of $81 million widened from operating loss of $73 million in the prior-year quarter.
Allstate Brand Results:
Allstate brand – Auto – reported net written premium growth of 2.9% in the first quarter, reflecting 6.1% increase in average premiums from the prior-year quarter. This was partially offset by a 2.9% decline in policies in force. Combined ratio of 90.6% improved 840 bps from the prior-year quarter on increased average earned premiums, lower frequency and lesser catastrophe losses.
Allstate brand – Homeowners net written premiums displayed a slight year-over-year increase in the first quarter. Increase in average premium and lower reinsurance costs were offset by a 1.4% decline in policies in force. Combined ratio of 93.7% deteriorated 30 bps from the prior-year quarter due to higher expense ratio.
The Esurance brandrecorded net written premium growth of 1.1% from the prior-year quarter due to increase in auto average premiums. Combined ratio of 102.4% improved 380 bps year over year on the back of lower expense ratio.
The Encompass brand’scombined ratio of 111.7% deteriorated 590 bps from the prior-year quarter.
Allstate brand – Other Personal Lines – recordednet written premiums of $368 million, up 4.2%. Combined ratio of 93.1% deteriorated 50 bps from the prior-year quarter due to higher expenses and unfavorable prior year reserve development.
Allstate Corporation (The) Price, Consensus and EPS Surprise
As of Mar 31, 2017, total shareholders’ equity was $21.1 billion, up 3% from year-end 2016. Total assets increased to $110.2 billion, up 2% from the end of 2016. Long-term debt remained flat year over year at $6.35 billion.
Cash in-flow from operating activities totaled $857 million, up 20% year over year.
Stock Repurchase and Dividend Update
Allstate returned $371 million of capital to shareholders during the first quarter through a combination of $122 million in common stock dividends and repurchase of outstanding shares worth $249 million.
As of Mar 31, 2017, the company had $442 million remaining on the $1.5 billion common share repurchase program.
Zacks Rank
Allstate currently carries a Zacks Rank #4 (Sell).
Among other players from the same space that have reported first-quarter earnings so far, the bottom line at The Progressive Corporation (PGR - Free Report) , The Travelers Companies, Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) missed their respective Zacks Consensus Estimate.
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Allstate (ALL) Q1 Earnings Beat Estimates, Increase Y/Y
Allstate Corporation’s (ALL - Free Report) first-quarter 2017 operating earnings per share of $1.64 beat the Zacks Consensus Estimate of $1.04. Earnings also soared 95% year over year on higher revenues.
Allstate generated total revenue of $9.4 billion in the first quarter. The top line surpassed the Zacks Consensus Estimate by 13.2% and also improved 6.3% year over year. The upside was driven by premium growth as well as a decent increase in net investment income.
In the first quarter, operating expenses increased 11.7% year over year to $1.1 billion.
Segments Results:
Property-liability: Insurance premiums amounted $7.7 billion in the first quarter, up 2.7% year over year. Net income of $652 million skyrocketed 193% year over year on the back of a lower loss ratio. The underlying combined ratio of 93.6% improved 480 basis points (bps) over the last-year quarter due to increased expense ratio. The segment recorded catastrophe losses of $781 million, down 5.6% year over year.
Allstate Financial: Premium and contract charges of $593 million grew 4.7% year over year. Operating income of $1130 million was 5.8% higher than the prior-year quarter due to better investment results at Allstate Annuities.
Corporate and Others: Revenues generated primarily from net investment income totaled $11 million, up 10% year over year.Operating loss of $81 million widened from operating loss of $73 million in the prior-year quarter.
Allstate Brand Results:
Allstate brand – Auto – reported net written premium growth of 2.9% in the first quarter, reflecting 6.1% increase in average premiums from the prior-year quarter. This was partially offset by a 2.9% decline in policies in force. Combined ratio of 90.6% improved 840 bps from the prior-year quarter on increased average earned premiums, lower frequency and lesser catastrophe losses.
Allstate brand – Homeowners net written premiums displayed a slight year-over-year increase in the first quarter. Increase in average premium and lower reinsurance costs were offset by a 1.4% decline in policies in force. Combined ratio of 93.7% deteriorated 30 bps from the prior-year quarter due to higher expense ratio.
The Esurance brandrecorded net written premium growth of 1.1% from the prior-year quarter due to increase in auto average premiums. Combined ratio of 102.4% improved 380 bps year over year on the back of lower expense ratio.
The Encompass brand’scombined ratio of 111.7% deteriorated 590 bps from the prior-year quarter.
Allstate brand – Other Personal Lines – recordednet written premiums of $368 million, up 4.2%. Combined ratio of 93.1% deteriorated 50 bps from the prior-year quarter due to higher expenses and unfavorable prior year reserve development.
Allstate Corporation (The) Price, Consensus and EPS Surprise
Allstate Corporation (The) Price, Consensus and EPS Surprise | Allstate Corporation (The) Quote
Capital Position
As of Mar 31, 2017, total shareholders’ equity was $21.1 billion, up 3% from year-end 2016. Total assets increased to $110.2 billion, up 2% from the end of 2016. Long-term debt remained flat year over year at $6.35 billion.
Cash in-flow from operating activities totaled $857 million, up 20% year over year.
Stock Repurchase and Dividend Update
Allstate returned $371 million of capital to shareholders during the first quarter through a combination of $122 million in common stock dividends and repurchase of outstanding shares worth $249 million.
As of Mar 31, 2017, the company had $442 million remaining on the $1.5 billion common share repurchase program.
Zacks Rank
Allstate currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Among other players from the same space that have reported first-quarter earnings so far, the bottom line at The Progressive Corporation (PGR - Free Report) , The Travelers Companies, Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) missed their respective Zacks Consensus Estimate.
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Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
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