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Will Lower Premiums Affect Assurant's (AIZ) Q3 Earnings?
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Assurant, Inc. (AIZ - Free Report) is slated to report third-quarter 2017 results on Nov 2, after the market closes. Last quarter, the company delivered a positive earnings surprise of 3.16%. Let’s see, how things are shaping up for this announcement.
Factors to be Considered This Quarter
Assurant has likely witnessed a decline in net premiums earned in the soon-to-be-reported quarter, mainly due to the ongoing normalization of lender-placed insurance business plus reduced contributions from mortgage solutions. Also, unprecedented hurricane activity will add to this downside. To that end, Assurant has projected pre-tax reportable catastrophe losses, net of reinsurance and reinstatement premiums, arising from Harvey, to range between $134 million and $140 million. Such losses will impact the performance of Global Housing segment the most in the third quarter.
Further, the company anticipates loss from Irma to exceed its retention of $125 million pre-tax. However, these losses will be covered by the company’s reinsurance program.
Additionally, the company has likely reported lower revenues, mainly due to lower premiums earned as well as a decline in fees and other income. In fact, the Zacks Consensus Estimate for revenues is currently pegged at $1.6 billion, reflecting a noticeable decrease of 6.4% from the year-ago quarter.
Also, the company has likely incurred higher expenses, mainly due to a rise in selling, underwriting, general and administrative expenses plus interest expenses. This in turn will weigh on the Multi line insurer’s operating margin expansion.
However, the company has likely experienced higher fee income and earnings at Global Preneed in the third quarter and estimates further growth in the same from this segment, fueled by sales increase across North America owing to alignment with market leaders and operational efficiencies.
Also, Assurant has probably witnessed some solid results at the Global Lifestyle segment on the back of higher contributions from service contracts in vehicle protection and Connected Living. Also, an improved performance in mobile business as well as higher contributions from vehicle protection and expense efficiencies, have possibly augured well for the company to achieve good results in the third quarter.
Earnings Whispers
Our proven model does not conclusively show that Assurant is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a bullish 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: Assurant has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of $1.79. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Assurant carries a Zacks Rank #4 (Sell), which lowers the predictive power of ESP. We caution against all Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Some stocks worth considering from the finance sector with the right combination of elements to surpass estimates this quarter are as follows:
Apollo Investment Corporation has an Earnings ESP of +2.13%. This Zacks #3 Ranked company is slated to report third-quarter earnings on Nov 3.
American Equity Investment Life Holding Company (AEL - Free Report) has an Earnings ESP of +0.40% and holds a Zacks Rank #2. The company is set to report third-quarter earnings on Nov 6.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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Will Lower Premiums Affect Assurant's (AIZ) Q3 Earnings?
Assurant, Inc. (AIZ - Free Report) is slated to report third-quarter 2017 results on Nov 2, after the market closes. Last quarter, the company delivered a positive earnings surprise of 3.16%. Let’s see, how things are shaping up for this announcement.
Factors to be Considered This Quarter
Assurant has likely witnessed a decline in net premiums earned in the soon-to-be-reported quarter, mainly due to the ongoing normalization of lender-placed insurance business plus reduced contributions from mortgage solutions. Also, unprecedented hurricane activity will add to this downside. To that end, Assurant has projected pre-tax reportable catastrophe losses, net of reinsurance and reinstatement premiums, arising from Harvey, to range between $134 million and $140 million. Such losses will impact the performance of Global Housing segment the most in the third quarter.
Further, the company anticipates loss from Irma to exceed its retention of $125 million pre-tax. However, these losses will be covered by the company’s reinsurance program.
Additionally, the company has likely reported lower revenues, mainly due to lower premiums earned as well as a decline in fees and other income. In fact, the Zacks Consensus Estimate for revenues is currently pegged at $1.6 billion, reflecting a noticeable decrease of 6.4% from the year-ago quarter.
Also, the company has likely incurred higher expenses, mainly due to a rise in selling, underwriting, general and administrative expenses plus interest expenses. This in turn will weigh on the Multi line insurer’s operating margin expansion.
However, the company has likely experienced higher fee income and earnings at Global Preneed in the third quarter and estimates further growth in the same from this segment, fueled by sales increase across North America owing to alignment with market leaders and operational efficiencies.
Also, Assurant has probably witnessed some solid results at the Global Lifestyle segment on the back of higher contributions from service contracts in vehicle protection and Connected Living. Also, an improved performance in mobile business as well as higher contributions from vehicle protection and expense efficiencies, have possibly augured well for the company to achieve good results in the third quarter.
Earnings Whispers
Our proven model does not conclusively show that Assurant is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a bullish 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: Assurant has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of $1.79. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Assurant, Inc. Price and EPS Surprise
Assurant, Inc. Price and EPS Surprise | Assurant, Inc. Quote
Zacks Rank: Assurant carries a Zacks Rank #4 (Sell), which lowers the predictive power of ESP. We caution against all Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Some stocks worth considering from the finance sector with the right combination of elements to surpass estimates this quarter are as follows:
Ares Capital Corporation (ARCC - Free Report) is set to report third-quarter earnings on Nov 2 with an Earnings ESP of +2.86% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Apollo Investment Corporation has an Earnings ESP of +2.13%. This Zacks #3 Ranked company is slated to report third-quarter earnings on Nov 3.
American Equity Investment Life Holding Company (AEL - Free Report) has an Earnings ESP of +0.40% and holds a Zacks Rank #2. The company is set to report third-quarter earnings on Nov 6.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>