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Hartford Financial (HIG) Q4 Earnings: What's in the Offing?

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The Hartford Financial Services Group, Inc. (HIG - Free Report) will release fourth-quarter 2017 financial results on Feb 8, after the closing bell.

Last quarter, the company delivered a positive earnings surprise of 1.7%.  Let’s see how things are shaping up for this announcement.

Factors Influencing Q4

Hartford Financial’s top line is likely to be boosted by strong performance of the Commercial Lines and Personal Auto business in the fourth quarter, continuing the previous trend.

Commercial Lines in small and middle markets are also likely to have performed well, boosting both the top line and bottom line, continuing the previous quarter’s trend.

The company’s Group Benefit and Mutual Funds segments are expected to have delivered a solid performance, reflecting the company’s claims of improvements made in its book of business over the years.

In addition, Hartford Financial’s strategic investment in products, distribution, data and analytics, as well as digital capabilities, aimed at customer acquisition and retention, are likely to contribute to revenue growth.

The company is also expected to enhance shareholders’ value during the quarter through share repurchases, which might impact the bottom line by limiting the outstanding share count.

However, higher auto loss costs are expected to have adversely affected underwriting margins.

Moreover, the company expects the recent U.S. corporate tax law and catastrophe losses (California wildfires) to impact financial results of the quarter. Hartford Financial estimates witnessing a reduction of nearly $850 million due to the impact of tax cut and a decline of $117 million (after tax) owing to catastrophe losses.

Earnings Whispers

Our proven model does not conclusively show that Hartford Financial is likely to beat on earnings in the quarter. That is because a stock needs to have both a positive Earnings ESP and a 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: Hartford Financial has an Earnings ESP of +7.38%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The Hartford Financial Services Group, Inc.  Price and EPS Surprise

Zacks Rank: Hartford Financial has a Zacks Rank #4 (Sell).

Please note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies from the Finance sector that you may want to consider as they have the right combination of elements to post an earnings beat this quarter:

CNA Financial Corporation (CNA - Free Report) is set to report fourth-quarter earnings on Feb 12. The stock has an Earnings ESP of +2.75% and a Zacks Rank of 1.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Primerica, Inc. (PRI - Free Report) has an Earnings ESP of +0.58% and is a Zacks #2 Ranked player. The company is set to announce fourth-quarter earnings on Feb 7.

Torchmark Corporation has an Earnings ESP of +0.33% and is a Zacks #2 Ranked player. The company is slated to release fourth-quarter earnings on Feb 7.

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