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W.R. Berkley (WRB) Q2 Earnings Top Estimates, Revenues Lag
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W.R. Berkley Corporation’s (WRB - Free Report) second-quarter 2018 operating income of 97 cents per share beat the Zacks Consensus Estimate of 82 cents by 18.3%. Also, the bottom line surged 49.2% year over year.
W.R. Berkley Corporation Price, Consensus and EPS Surprise
The company witnessed improved revenues attributable to higher premiums, favorable underwriting performance as well as increase in net investment income. Also, expenses slightly declined in the reported quarter.
Including net realized and unrealized pre-tax gains, net income soared 64.7% from the year-ago quarter to $1.40 per share.
Behind the Headlines
W.R. Berkley’s net premiums written for the quarter under review were $1.6 billion, up 3.8% year over year. Increased market penetration, rate improvements and a solid economy were responsible for the upside. Also, higher premiums written at the Insurance segment contributed to this uptick. However, lower premiums written at the Reinsurance segment partially offset the improvement.
Operating revenues came in at $1.8 billion, up 1.5% year over year, mainly owing to higher net premiums earned and improved net investment income. However, the top line missed the Zacks Consensus Estimate by 2.7%.
Investment income rose 13.7% year over year to $153.8 million, driven by an increase in the yield on fixed maturity securities and a higher base of invested assets.
Total expenses dipped 0.3% to $1.7 billion, primarily on lower other operating costs and expenses.
Catastrophe loss totaled $14 million in the reported quarter. Consolidated combined ratio (a measure of underwriting profitability) came in at 94.9%, improving 20 basis points (bps) from the prior-year period.
Segment Details
Net premiums written at the Insurance segment grew 5.2% year over year to $1.5 billion in the quarter under consideration. This increase was attributable to higher premiums written under other liability, workers’ compensation, short-tail lines, commercial automobile as well as professional liability. Combined ratio in this segment deteriorated 30 bps year over year to 94.4%.
Net premiums written in the Reinsurance segment decreased 12.3% year over year to $110.6 million due to substantially lower premiums written under casualty as well as property reinsurance. Combined ratio improved 370 bps to 100.7%.
Financial Update
W.R. Berkley exited the second quarter with total assets worth $24.6 billion, up 1.3% from the year-end 2017.
Book value per share inched up 0.1% from the year-end 2017 to $44.58 as of Jun 30, 2018.
Cash flow from operations for the quarter under discussion totaled $139.4 million, down 6.7% from the year-ago quarter.
The company’s return on equity improved 470 bps to 13.3%.
Share Repurchase Update
In the reported quarter, the company did not buy back any shares of its common stock. Hence, in the first half of 2018, the company repurchased 0.1 million shares worth $6.8 million.
In the quarter under review, the company returned capital worth $79 million to shareholders, which comprised $61 million as special dividends.
Among other players from the insurance industry having reported second-quarter earnings so far, the bottom line of The Progressive Corporation (PGR - Free Report) , MGIC Investment Corporation (MTG - Free Report) and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate.
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W.R. Berkley (WRB) Q2 Earnings Top Estimates, Revenues Lag
W.R. Berkley Corporation’s (WRB - Free Report) second-quarter 2018 operating income of 97 cents per share beat the Zacks Consensus Estimate of 82 cents by 18.3%. Also, the bottom line surged 49.2% year over year.
W.R. Berkley Corporation Price, Consensus and EPS Surprise
W.R. Berkley Corporation Price, Consensus and EPS Surprise | W.R. Berkley Corporation Quote
The company witnessed improved revenues attributable to higher premiums, favorable underwriting performance as well as increase in net investment income. Also, expenses slightly declined in the reported quarter.
Including net realized and unrealized pre-tax gains, net income soared 64.7% from the year-ago quarter to $1.40 per share.
Behind the Headlines
W.R. Berkley’s net premiums written for the quarter under review were $1.6 billion, up 3.8% year over year. Increased market penetration, rate improvements and a solid economy were responsible for the upside. Also, higher premiums written at the Insurance segment contributed to this uptick. However, lower premiums written at the Reinsurance segment partially offset the improvement.
Operating revenues came in at $1.8 billion, up 1.5% year over year, mainly owing to higher net premiums earned and improved net investment income. However, the top line missed the Zacks Consensus Estimate by 2.7%.
Investment income rose 13.7% year over year to $153.8 million, driven by an increase in the yield on fixed maturity securities and a higher base of invested assets.
Total expenses dipped 0.3% to $1.7 billion, primarily on lower other operating costs and expenses.
Catastrophe loss totaled $14 million in the reported quarter. Consolidated combined ratio (a measure of underwriting profitability) came in at 94.9%, improving 20 basis points (bps) from the prior-year period.
Segment Details
Net premiums written at the Insurance segment grew 5.2% year over year to $1.5 billion in the quarter under consideration. This increase was attributable to higher premiums written under other liability, workers’ compensation, short-tail lines, commercial automobile as well as professional liability. Combined ratio in this segment deteriorated 30 bps year over year to 94.4%.
Net premiums written in the Reinsurance segment decreased 12.3% year over year to $110.6 million due to substantially lower premiums written under casualty as well as property reinsurance. Combined ratio improved 370 bps to 100.7%.
Financial Update
W.R. Berkley exited the second quarter with total assets worth $24.6 billion, up 1.3% from the year-end 2017.
Book value per share inched up 0.1% from the year-end 2017 to $44.58 as of Jun 30, 2018.
Cash flow from operations for the quarter under discussion totaled $139.4 million, down 6.7% from the year-ago quarter.
The company’s return on equity improved 470 bps to 13.3%.
Share Repurchase Update
In the reported quarter, the company did not buy back any shares of its common stock. Hence, in the first half of 2018, the company repurchased 0.1 million shares worth $6.8 million.
In the quarter under review, the company returned capital worth $79 million to shareholders, which comprised $61 million as special dividends.
Zacks Rank
W.R. Berkley 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 Insurers
Among other players from the insurance industry having reported second-quarter earnings so far, the bottom line of The Progressive Corporation (PGR - Free Report) , MGIC Investment Corporation (MTG - Free Report) and RLI Corp. (RLI - Free Report) beat the respective Zacks Consensus Estimate.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>