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The Progressive Corp.’s (PGR - Free Report) fourth-quarter 2017 operating earnings per share of 99 cents beat the Zacks Consensus Estimate of 77 cents. The bottom line improved 55% year over year.
Progressive Corporation (The) Price, Consensus and EPS Surprise
Including net realized losses, net income per share was 98 cents, up 48% year over year.
Behind the Headlines
Progressive recorded net premiums written of $6.8 billion in the quarter under review, up 22% from $5.6 billion in the year-ago quarter. Also, net premiums earned grew 17% year over year to $6.8 billion from $5.9 billion
Net realized loss on securities was $9.7 million, comparing unfavorably with a gain of $22.1 million in the year-ago quarter. Combined ratio — percentage of premiums paid out as claims and expenses — improved 130 basis points (bps) from the prior-year quarter to 91.4%.
Numbers in December 2017
Operating revenues improved 18% year over year to $1.97 billion. This top-line growth was driven by a 40% surge in service revenues, 16% higher fees and other revenues and 17% increase in both premiums and investment income.
Total expense increased 19.6% to nearly $2 billion. This rise in expenses can be primarily attributed to 19.8% higher loss and loss adjustment expenses, 16.5% increase in policy acquisition costs and 22% higher other underwriting expenses.
In December 2017, policies in force were impressive at the Personal Auto segment, improving 13% from December 2016 to 11.7 million. Special Lines inched up 2% from the prior-year month to 4.4 million.
In Progressive’s Personal Auto segment, Direct Auto grew 13% year over year to 6 million while Agency Auto ascended 12% year over year to 5.7 million.
Progressive’s Commercial Auto segment grew 6% year over year to 0.6 million. The Property business had about 1.5 million policies in force in the reported month, up 22% year over year.
Progressive’s book value per share was $15.96 as of Dec 31, 2017, up 16.3% from $13.72 as of Dec 31, 2016.
Return-on-equity on a trailing 12-month basis was 21.7%, having expanded 680 bps from 14.9% in December 2016. Debt-to-total capital ratio contracted 200 bps year over year to 26.3% as of Dec 31, 2017.
The bottom line at Brown & Brown, Inc. (BRO - Free Report) , MGIC Investment Corporation (MTG - Free Report) and The Travelers Companies, Inc. (TRV - Free Report) surpassed their respective Zacks Consensus Estimate in the fourth quarter.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Progressive (PGR) Q4 Earnings Surpass, Premiums Grow Y/Y
The Progressive Corp.’s (PGR - Free Report) fourth-quarter 2017 operating earnings per share of 99 cents beat the Zacks Consensus Estimate of 77 cents. The bottom line improved 55% year over year.
Progressive Corporation (The) Price, Consensus and EPS Surprise
Progressive Corporation (The) Price, Consensus and EPS Surprise | Progressive Corporation (The) Quote
Including net realized losses, net income per share was 98 cents, up 48% year over year.
Behind the Headlines
Progressive recorded net premiums written of $6.8 billion in the quarter under review, up 22% from $5.6 billion in the year-ago quarter. Also, net premiums earned grew 17% year over year to $6.8 billion from $5.9 billion
Net realized loss on securities was $9.7 million, comparing unfavorably with a gain of $22.1 million in the year-ago quarter. Combined ratio — percentage of premiums paid out as claims and expenses — improved 130 basis points (bps) from the prior-year quarter to 91.4%.
Numbers in December 2017
Operating revenues improved 18% year over year to $1.97 billion. This top-line growth was driven by a 40% surge in service revenues, 16% higher fees and other revenues and 17% increase in both premiums and investment income.
Total expense increased 19.6% to nearly $2 billion. This rise in expenses can be primarily attributed to 19.8% higher loss and loss adjustment expenses, 16.5% increase in policy acquisition costs and 22% higher other underwriting expenses.
In December 2017, policies in force were impressive at the Personal Auto segment, improving 13% from December 2016 to 11.7 million. Special Lines inched up 2% from the prior-year month to 4.4 million.
In Progressive’s Personal Auto segment, Direct Auto grew 13% year over year to 6 million while Agency Auto ascended 12% year over year to 5.7 million.
Progressive’s Commercial Auto segment grew 6% year over year to 0.6 million. The Property business had about 1.5 million policies in force in the reported month, up 22% year over year.
Progressive’s book value per share was $15.96 as of Dec 31, 2017, up 16.3% from $13.72 as of Dec 31, 2016.
Return-on-equity on a trailing 12-month basis was 21.7%, having expanded 680 bps from 14.9% in December 2016. Debt-to-total capital ratio contracted 200 bps year over year to 26.3% as of Dec 31, 2017.
Zacks Rank and Performance of Insurer
Progressive carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The bottom line at Brown & Brown, Inc. (BRO - Free Report) , MGIC Investment Corporation (MTG - Free Report) and The Travelers Companies, Inc. (TRV - Free Report) surpassed their respective Zacks Consensus Estimate in the fourth quarter.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>