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CNA Financial Corporation (CNA - Free Report) reported third-quarter 2017 operating income of 58 cents per share, beating the Zacks Consensus Estimate by 13.7%. However, the bottom line deteriorated 49.6% from the prior-year quarter.
CNA Financial Corporation Price, Consensus and EPS Surprise
The quarter witnessed significantly higher catastrophe losses, which impacted the overall company’s performance. Also, the company displayed lower net investment income in the reported quarter. Nonetheless, the company experienced improvement in its underlying combined ratio.
Including net realized investment gains, net income of 53 cents per share plummeted 57.9% year over year.
Behind Third-Quarter Headlines
Net investment income declined about 6.1% year over year to $308 million due to decrease in limited partnership returns in the quarter.
Net written premiums at Property & Casualty Operations slipped 1.5% year over year to $1.6 billion. Net operating income plunged about 49.2% year over year to $167 million due to substantially higher catastrophe losses in the reported quarter. However, improvement in non-catastrophe current accident year underwriting results partially offset the downside. Combined ratio deteriorated 1330 basis points (bps) on a year-over-year basis to 103.7%.
As of Sep 30, 2017, book value (excluding AOCI) was $44.48 per share, down 0.9% from Dec 31, 2016.
Segment Results
Specialty net written premiums fell 3.8% year over year to $705 million. Timing of certain renewals resulted in this downside. Retention was 89% in the reported quarter. Combined ratio deteriorated 240 bps to 82.3%.
Commercial net written premiums inched up 0.4% year over year to $687 million, driven by higher new business within Middle Markets. Retention came in at 85% in the quarter under review. Combined ratio deteriorated 1740 bps to 117.2%.
International net written premiums remained flat year over year at $207 million. Combined ratio deteriorated 3270 bps to 125.9%.
Life & Group Non-Core operating revenues rose 2.8% year over year to $331 million. Net operating income soared 66.7% year over year to $10 million. Corporate & Other Non-Core net operating loss of $18 million was considerably narrower than a loss of $24 million in the year-ago quarter.
Dividend Update
The board of directors of CNA Financial announced a dividend of 30 cents per share during the reported quarter. The dividend will be paid on Nov 29 to stockholders of record as of Nov 13, 2017.
Zacks Rank
CNA Financial currently carries a Zacks Rank #4 (Sell).
Among other players from the same space 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) surpassed their respective Zacks Consensus Estimate.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
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CNA Financial (CNA) Q3 Earnings Beat Estimates, Plunge Y/Y
CNA Financial Corporation (CNA - Free Report) reported third-quarter 2017 operating income of 58 cents per share, beating the Zacks Consensus Estimate by 13.7%. However, the bottom line deteriorated 49.6% from the prior-year quarter.
CNA Financial Corporation Price, Consensus and EPS Surprise
CNA Financial Corporation Price, Consensus and EPS Surprise | CNA Financial Corporation Quote
The quarter witnessed significantly higher catastrophe losses, which impacted the overall company’s performance. Also, the company displayed lower net investment income in the reported quarter. Nonetheless, the company experienced improvement in its underlying combined ratio.
Including net realized investment gains, net income of 53 cents per share plummeted 57.9% year over year.
Behind Third-Quarter Headlines
Net investment income declined about 6.1% year over year to $308 million due to decrease in limited partnership returns in the quarter.
Net written premiums at Property & Casualty Operations slipped 1.5% year over year to $1.6 billion. Net operating income plunged about 49.2% year over year to $167 million due to substantially higher catastrophe losses in the reported quarter. However, improvement in non-catastrophe current accident year underwriting results partially offset the downside. Combined ratio deteriorated 1330 basis points (bps) on a year-over-year basis to 103.7%.
As of Sep 30, 2017, book value (excluding AOCI) was $44.48 per share, down 0.9% from Dec 31, 2016.
Segment Results
Specialty net written premiums fell 3.8% year over year to $705 million. Timing of certain renewals resulted in this downside. Retention was 89% in the reported quarter. Combined ratio deteriorated 240 bps to 82.3%.
Commercial net written premiums inched up 0.4% year over year to $687 million, driven by higher new business within Middle Markets. Retention came in at 85% in the quarter under review. Combined ratio deteriorated 1740 bps to 117.2%.
International net written premiums remained flat year over year at $207 million. Combined ratio deteriorated 3270 bps to 125.9%.
Life & Group Non-Core operating revenues rose 2.8% year over year to $331 million. Net operating income soared 66.7% year over year to $10 million.
Corporate & Other Non-Core net operating loss of $18 million was considerably narrower than a loss of $24 million in the year-ago quarter.
Dividend Update
The board of directors of CNA Financial announced a dividend of 30 cents per share during the reported quarter. The dividend will be paid on Nov 29 to stockholders of record as of Nov 13, 2017.
Zacks Rank
CNA Financial 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 P&C Insurers
Among other players from the same space 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) surpassed their respective Zacks Consensus Estimate.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
Click here for Zacks' private trades >>