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Why Is ProAssurance (PRA) Down 3.2% Since its Last Earnings Report?
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A month has gone by since the last earnings report for ProAssurance Corporation (PRA - Free Report) . Shares have lost about 3.2% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is PRA due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
ProAssurance Q4 Earnings & Revenues Miss Estimates
ProAssurance’s fourth-quarter 2017 operating earnings per share of 55 cents missed the Zacks Consensus Estimate by 11%. The bottom line also declined 33.7% year over year due to lower revenues.
ProAssurance’s fourth-quarter operating revenues declined 3.6% to $212 million from the prior-year quarter due to lower premiums. The top line also missed the Zacks Consensus Estimate by 1.4%.
QuarterlyOperational Update
Gross premiums written grew 2.3% year over year to $191.7 million, primarily driven by higher premiums in our Workers' Compensation segment. Net premiums earned, however, decreased 5.5% year-over-year.
Net investment income increased 5.4% year over year to $26.1 million.
Total expenses increased 0.4% year over year to $175 million. The rise in costs mainly stemmed from higher underwriting, policy acquisition and operating expenses.
Full-Year Updates
For 2017, the company reported adjusted earnings of $2.02, that deteriorated 17% year over year.
For 2017, ProAssurance’s operating revenues came in at $841.7 million, down 0.1% year over year,
Quarterly Segment Results
Specialty P&C Insurance Segment
Total revenues of $115.3 million declined 7.1% year over year .
Gross premiums written were $121.3 million, down 3.4% from the year-ago quarter.
Total expenses of $98.1 million jumped 9.4% year over year.
Workers' Compensation Segment
Total revenues of $57.8 million rose 1.4% year over year on the back of higher net premiums earned.
Gross premiums written were $60.1 million, up 12.4% over the year-ago quarter.
Total expenses of $52 million, declined 6.6% year over year.
Lloyd's Syndicate Segment
Total revenues of $12.5 million declined 15.2% year over year.
Gross premiums written were $13.2 million, down 7.4% from the year-ago quarter.
Total expenses of $10.7 million decreased 25.3% year over year.
Corporate Segment
Total revenues of $23.6 million declined 44% year over year.
Operating expenses of $8.2 million declined 18.3% over the year-ago quarter. Interest expenses of $4.4 million jumped 18.5% year over year.
Financial Position
As of Dec 31, 2017, ProAssurance’s total investments were $3.7 billion, down 6% from year-end 2016.
As of Dec 31, 2017, the company’s total assets were $4.9 billion, down 2.7% from year-end 2016.
As of Dec 31, 2017, the insurer’s shareholder equity was $1.6 billion, down 11% from Dec 31, 2016.
Share Repurchase & Dividend Update
The company did not repurchase any shares during 2017. As of Feb 16, 2018, it had approximately $110 million available in its board-authorized stock repurchase program.
The company’s board declared a special dividend of $4.69 per share in November 2017, in addition to a regular dividend of 31 cents per share, both paid in January 2018.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There have been three revisions lower for the current quarter. In the past month, the consensus estimate has shifted by 12.8% due to these changes.
At this time, PRA has a subpar Growth Score of D, though it is lagging a bit on the momentum front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. It's no surprise PRA has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Why Is ProAssurance (PRA) Down 3.2% Since its Last Earnings Report?
A month has gone by since the last earnings report for ProAssurance Corporation (PRA - Free Report) . Shares have lost about 3.2% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is PRA due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
ProAssurance Q4 Earnings & Revenues Miss Estimates
ProAssurance’s fourth-quarter 2017 operating earnings per share of 55 cents missed the Zacks Consensus Estimate by 11%. The bottom line also declined 33.7% year over year due to lower revenues.
ProAssurance’s fourth-quarter operating revenues declined 3.6% to $212 million from the prior-year quarter due to lower premiums. The top line also missed the Zacks Consensus Estimate by 1.4%.
Quarterly Operational Update
Gross premiums written grew 2.3% year over year to $191.7 million, primarily driven by higher premiums in our Workers' Compensation segment. Net premiums earned, however, decreased 5.5% year-over-year.
Net investment income increased 5.4% year over year to $26.1 million.
Total expenses increased 0.4% year over year to $175 million. The rise in costs mainly stemmed from higher underwriting, policy acquisition and operating expenses.
Full-Year Updates
For 2017, the company reported adjusted earnings of $2.02, that deteriorated 17% year over year.
For 2017, ProAssurance’s operating revenues came in at $841.7 million, down 0.1% year over year,
Quarterly Segment Results
Specialty P&C Insurance Segment
Total revenues of $115.3 million declined 7.1% year over year .
Gross premiums written were $121.3 million, down 3.4% from the year-ago quarter.
Total expenses of $98.1 million jumped 9.4% year over year.
Workers' Compensation Segment
Total revenues of $57.8 million rose 1.4% year over year on the back of higher net premiums earned.
Gross premiums written were $60.1 million, up 12.4% over the year-ago quarter.
Total expenses of $52 million, declined 6.6% year over year.
Lloyd's Syndicate Segment
Total revenues of $12.5 million declined 15.2% year over year.
Gross premiums written were $13.2 million, down 7.4% from the year-ago quarter.
Total expenses of $10.7 million decreased 25.3% year over year.
Corporate Segment
Total revenues of $23.6 million declined 44% year over year.
Operating expenses of $8.2 million declined 18.3% over the year-ago quarter. Interest expenses of $4.4 million jumped 18.5% year over year.
Financial Position
As of Dec 31, 2017, ProAssurance’s total investments were $3.7 billion, down 6% from year-end 2016.
As of Dec 31, 2017, the company’s total assets were $4.9 billion, down 2.7% from year-end 2016.
As of Dec 31, 2017, the insurer’s shareholder equity was $1.6 billion, down 11% from Dec 31, 2016.
Share Repurchase & Dividend Update
The company did not repurchase any shares during 2017. As of Feb 16, 2018, it had approximately $110 million available in its board-authorized stock repurchase program.
The company’s board declared a special dividend of $4.69 per share in November 2017, in addition to a regular dividend of 31 cents per share, both paid in January 2018.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There have been three revisions lower for the current quarter. In the past month, the consensus estimate has shifted by 12.8% due to these changes.
ProAssurance Corporation Price and Consensus
ProAssurance Corporation Price and Consensus | ProAssurance Corporation Quote
VGM Scores
At this time, PRA has a subpar Growth Score of D, though it is lagging a bit on the momentum front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. It's no surprise PRA has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.