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CNA Financial (CNA) to Report Q1 Earnings: What's in Store?

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CNA Financial Corporation (CNA - Free Report) is slated to report first-quarter 2019 results on Apr 29, before market open. The company delivered positive surprise in three of the last four quarters.

Let’s see how things are shaping up for this announcement.

CNA Financial’s first-quarter results are likely to benefit from solid performances from its segments - Commercial and Specialty.

Premiums are likely to be fueled by increase in new business, renewal premium change and solid retention. The Zacks Consensus Estimate for the metric is pegged at $1.8 billion million, implying an increase of 3.2% from the year-ago period.

However, the company estimates International premiums to be low, given re-underwriting and reinsurance actions taken to return the underperforming operations within international to profitability.

Improved interest rates, possibility of higher limited partnership returns and stable fixed income returns are likely to aid net investment income in the to-be reported quarter. The Zacks Consensus Estimate for investment income is pegged at $498 million, indicating an increase of nearly 23% year over year.

Higher premiums and investment income are likely to aid revenues in the quarter to-be reported.

CNA Financial continues to efficiently manage its long-term care book of business through product claim management, thereby mitigating risk and aiding rate increase.

Expenses are likely to increase on higher net claims and benefits plus amortization of deferred acquisition costs. This rise in expenses could restrict operating margin expansion.

The Zacks Consensus Estimate for earnings stands at $1.04, implying nearly 1% increase from the year-earlier quarter figure.

What Our Quantitative Model States

Our proven model does not conclusively show that CNA Financial is likely to beat on earnings this season. This 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. But that is not the case here as you will see below.

Earnings ESP: CNA Financial has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate as well as the Zacks Consensus Estimate is pegged at $1.04. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

CNA Financial Corporation Price and EPS Surprise

Zacks Rank: CNA Financial carries a Zacks Rank #3. Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.

We caution against Sell-rated stocks (4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Some stocks from the property and casualty industry with the perfect mix of elements to outshine estimates this time around are as follows:

The Allstate Corporation (ALL - Free Report) is set to report first-quarter earnings on May 1. The company has an Earnings ESP of +0.70% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Everest Re Group, Ltd. has an Earnings ESP of +3.27% and a Zacks Rank of 3. The company is scheduled to release first-quarter earnings on May 6.

RenaissanceRe Holdings Ltd. (RNR - Free Report) has an Earnings ESP of +3.73% and a Zacks Rank of 2. The company is slated to announce first-quarter earnings on May 7.

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