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Markel (MKL) Q3 Earnings and Revenues Surpass Estimates

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Markel Corporation (MKL - Free Report) delivered third-quarter 2018 income of $28.50 per share, surpassing the Zacks Consensus Estimate of $7.61. Moreover, the bottom line reversed the year-ago quarter’s loss of $18.82 per share.

Markel Corporation Price, Consensus and EPS Surprise

 

Markel Corporation Price, Consensus and EPS Surprise | Markel Corporation Quote

The company witnessed higher revenues as well as improved premiums at the Insurance and Reinsurance segments. However, an increase in expenses was a dampener.

Operational Update

Total operating revenues of $1.8 billion exceeded the Zacks Consensus Estimate by 2.4%. Also, the top line improved 17.1% year over year on higher premiums, investment income and other revenues.

Total operating expenses of Markel increased about 8.5% year over year to $1.7 billion.

Markel’s combined ratio improved 3500 basis points (bps) year over year to 99% in the reported quarter.

Segment Update

Insurance: Net written premiums were up 12.5% year over year to $1 billion in the quarter under review.

Underwriting profit came in at $42.5 million against the year-ago quarter’s loss of $159.5 million.

Combined ratio improved 2300 bps year over year to 96% in the quarter under discussion.

Reinsurance: Net written premiums rose 3% year over year to $195.3 million.

Underwriting loss of $33.7 million was significantly narrower than the year-ago quarter’s loss of $214.3 million.

Combined ratio improved 6800 bps year over year to 115% in the third quarter.

Financial Update

Markel exited the third quarter with investments, cash and cash equivalents plus restricted cash and cash equivalents of 21 billion, up 2.3% from the level at year-end 2017.

Debt balance decreased 3.4% to $2.9 billion as of Sep 30, 2018 from $3.1 billion at 2017 end.

Book value per share grew 3.1% from the tally at year-end 2017 to $704.70 as of Sep 30, 2018.

Net cash from operating activities for nine months ended Sep 30, 2018 was $307.5 million, up 27.5% from the same period in 2017.

Zacks Rank

Markel has a Zacks Rank #2 (Buy). 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 third-quarter earnings so far, the bottom line of The Progressive Corporation (PGR - Free Report) and MGIC Investment Corporation (MTG - Free Report) outpaced the respective Zacks Consensus Estimate while the metric of RLI Corp. (RLI - Free Report) lagged the same.

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