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W.R. Berkley (WRB) Posts Q3 Beats for Both Earnings and Revenues (Revised)
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W.R. Berkley Corporation’s (WRB - Free Report) third-quarter 2017 operating income of 36 cents per share beat the Zacks Consensus Estimate of 32 cents by 12.5%. But the bottom line plunged 59.1% year over year.
W.R. Berkley Corporation Price, Consensus and EPS Surprise
The company witnessed improved revenues largely owing to higher revenues from non-insurance business. Both Insurance as well as Reinsurance remained affected in the quarter. Expenses increased.
Including net realized gains of $1.02 per share, net income slumped 26.7% from the year-ago quarter to $1.26 per share.
Behind the Headlines
W.R. Berkley’s net premiums written for the quarter were $1.6 billion, down 2.2% year over year. Lower premiums written at both the Insurance and Reinsurance segments resulted in the downside.
Operating revenues came in at $1.8 billion, up 6.6% year over year, driven by higher revenues from non-insurance business. The top line surpassed the Zacks Consensus Estimate of $1.7 billion.
Investment income declined 2.2% year over year to $142.5 million.
Total expenses increased 6.9% to $1.8 billion, primarily due to higher loss and loss expenses plus rise in expenses from non-insurance businesses.
Catastrophe losses totaled $119 million in the quarter. Consolidated combined ratio (a measure of underwriting profitability) deteriorated 710 basis points (bps) year over year to 101.1%.
Segment Details
Net premiums written in the Insurance segment slipped 0.8% year over year to $1.4 billion in the quarter. This decrease was attributable to lower premiums written under other liability, short-tail lines and professional liability. Combined ratio in this segment deteriorated 240 bps year over year to 95.6%.
Net premiums written in the Reinsurance segment declined 15% year over year to $138.8 million due to substantially lower premiums written under property reinsurance. Combined ratio deteriorated 5340 bps to 104.4%.
Financial Update
W.R. Berkley exited the third quarter with total assets worth $24.3 billion, up 3.8% from the year-end 2016.
Book value per share rose 7.1% from the year-end 2016 to $44.60 as of Sep 30, 2017.
Cash flow from operations plunged 24.7% year over year to $279 million.
The company’s return on equity deteriorated 640 bps to 12.8%.
Share Repurchase Update
The company bought back 0.4 million shares in the quarter for $23.4 million.
Zacks Rank
Currently, W.R. Berkley has a Zacks Rank #5 (Strong Sell).
Among other players from the insurance industry that have reported third-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) beat their respective Zacks Consensus Estimate.
(We are reissuing this article to correct a mistake. The original article, issued Wednesday, October 25, 2017, should no longer be relied upon.)
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...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.
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W.R. Berkley (WRB) Posts Q3 Beats for Both Earnings and Revenues (Revised)
W.R. Berkley Corporation’s (WRB - Free Report) third-quarter 2017 operating income of 36 cents per share beat the Zacks Consensus Estimate of 32 cents by 12.5%. But the bottom line plunged 59.1% year over year.
W.R. Berkley Corporation Price, Consensus and EPS Surprise
W.R. Berkley Corporation Price, Consensus and EPS Surprise | W.R. Berkley Corporation Quote
The company witnessed improved revenues largely owing to higher revenues from non-insurance business. Both Insurance as well as Reinsurance remained affected in the quarter. Expenses increased.
Including net realized gains of $1.02 per share, net income slumped 26.7% from the year-ago quarter to $1.26 per share.
Behind the Headlines
W.R. Berkley’s net premiums written for the quarter were $1.6 billion, down 2.2% year over year. Lower premiums written at both the Insurance and Reinsurance segments resulted in the downside.
Operating revenues came in at $1.8 billion, up 6.6% year over year, driven by higher revenues from non-insurance business. The top line surpassed the Zacks Consensus Estimate of $1.7 billion.
Investment income declined 2.2% year over year to $142.5 million.
Total expenses increased 6.9% to $1.8 billion, primarily due to higher loss and loss expenses plus rise in expenses from non-insurance businesses.
Catastrophe losses totaled $119 million in the quarter. Consolidated combined ratio (a measure of underwriting profitability) deteriorated 710 basis points (bps) year over year to 101.1%.
Segment Details
Net premiums written in the Insurance segment slipped 0.8% year over year to $1.4 billion in the quarter. This decrease was attributable to lower premiums written under other liability, short-tail lines and professional liability. Combined ratio in this segment deteriorated 240 bps year over year to 95.6%.
Net premiums written in the Reinsurance segment declined 15% year over year to $138.8 million due to substantially lower premiums written under property reinsurance. Combined ratio deteriorated 5340 bps to 104.4%.
Financial Update
W.R. Berkley exited the third quarter with total assets worth $24.3 billion, up 3.8% from the year-end 2016.
Book value per share rose 7.1% from the year-end 2016 to $44.60 as of Sep 30, 2017.
Cash flow from operations plunged 24.7% year over year to $279 million.
The company’s return on equity deteriorated 640 bps to 12.8%.
Share Repurchase Update
The company bought back 0.4 million shares in the quarter for $23.4 million.
Zacks Rank
Currently, W.R. Berkley has a Zacks Rank #5 (Strong 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 insurance industry that have reported third-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) beat their respective Zacks Consensus Estimate.
(We are reissuing this article to correct a mistake. The original article, issued Wednesday, October 25, 2017, should no longer be relied upon.)
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...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 trade>>