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Alleghany Corporation reported first-quarter 2017 operating earnings of $7.29 per share missed the Zacks Consensus Estimate of $8.29 by 12.1%. The bottom line declined 22% from the prior-year quarter.
The company witnessed strong investment performance and solid underwriting discipline in the quarter.
Including one-time items, the company reported net income of $9.67 per share, down 3% year over year.
Operational Update
Operating revenues of $1.5 billion inched up 1% year over year. Revenues surpassed the Zacks Consensus Estimate of $1.4 billion.
Net premiums written declined 6.7% year over year to $1.2 billion.
Net investment income came in at $106.1 million in the quarter, up 10% year over year. The improvement was driven by higher returns from equity investment in Ares and investment returns in Ares managed funds.
Interest expenses were $20.9 million, up 3% year over year.
Underwriting profit declined 32.5% to $101.4 million.
Alleghany Corporation Price, Consensus and EPS Surprise
Reinsurance Segment: Net premiums written decreased 10.1% to $949.4 million owing to lower premiums related to a large whole account quota share treaty. Underwriting profit decreased 44.1% to $53.4 million.
Insurance Segment: Net premiums written increased 0.6% to $283.7 million driven by growth at PacificComp and CapSpecialty as well as an increase at RSUI. Underwriting profit decreased 12.2% to $48 million.
Financial Update
Alleghany exited the quarter with cash of $624.1 million as against $594.1 million at the end of 2016.
Debt balance of $1.5 billion was flat with Dec 2016-end level.
Alleghany’s shareholder equity at the end of the quarter was $8.2 billion compared with $7.9 billion at the 2016-end level.
Book value per share increased 3% from year-end 2016 to $530.86 as of Mar 31, 2017.
Share Repurchase Update
Alleghany did not repurchase any shares in the quarter. The company has $379.2 million shares available for repurchase.
Zacks Rank
Alleghany presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Among the other players that have reported first-quarter earnings so far, Chubb Limited (CB - Free Report) beat the Zacks Consensus Estimate but RLI Corp. (RLI - Free Report) and The Progressive Corporation (PGR - Free Report) missed expectations.
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Alleghany (Y) Q1 Earnings Miss, Revenues Beat Estimates
Alleghany Corporation reported first-quarter 2017 operating earnings of $7.29 per share missed the Zacks Consensus Estimate of $8.29 by 12.1%. The bottom line declined 22% from the prior-year quarter.
The company witnessed strong investment performance and solid underwriting discipline in the quarter.
Including one-time items, the company reported net income of $9.67 per share, down 3% year over year.
Operational Update
Operating revenues of $1.5 billion inched up 1% year over year. Revenues surpassed the Zacks Consensus Estimate of $1.4 billion.
Net premiums written declined 6.7% year over year to $1.2 billion.
Net investment income came in at $106.1 million in the quarter, up 10% year over year. The improvement was driven by higher returns from equity investment in Ares and investment returns in Ares managed funds.
Interest expenses were $20.9 million, up 3% year over year.
Underwriting profit declined 32.5% to $101.4 million.
Alleghany Corporation Price, Consensus and EPS Surprise
Alleghany Corporation Price, Consensus and EPS Surprise | Alleghany Corporation Quote
Segment Update
Reinsurance Segment: Net premiums written decreased 10.1% to $949.4 million owing to lower premiums related to a large whole account quota share treaty. Underwriting profit decreased 44.1% to $53.4 million.
Insurance Segment: Net premiums written increased 0.6% to $283.7 million driven by growth at PacificComp and CapSpecialty as well as an increase at RSUI. Underwriting profit decreased 12.2% to $48 million.
Financial Update
Alleghany exited the quarter with cash of $624.1 million as against $594.1 million at the end of 2016.
Debt balance of $1.5 billion was flat with Dec 2016-end level.
Alleghany’s shareholder equity at the end of the quarter was $8.2 billion compared with $7.9 billion at the 2016-end level.
Book value per share increased 3% from year-end 2016 to $530.86 as of Mar 31, 2017.
Share Repurchase Update
Alleghany did not repurchase any shares in the quarter. The company has $379.2 million shares available for repurchase.
Zacks Rank
Alleghany presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Among the other players that have reported first-quarter earnings so far, Chubb Limited (CB - Free Report) beat the Zacks Consensus Estimate but RLI Corp. (RLI - Free Report) and The Progressive Corporation (PGR - Free Report) missed expectations.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>