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Alleghany's (Y) Q1 Earnings Surpass Estimates, Down Y/Y
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Alleghany Corporation delivered first-quarter 2019 operating earnings of $9.66 per share, beating the Zacks Consensus Estimate by 32.5% on the back of higher revenues. However, the metric declined 14.1% year over year.
Operational Update
Revenues in the quarter improved 22.1% year over year to $1.9 billion, supported by solid organic growth and the buyout of Concord along with robust results in the company’s certain business lines.
Net premiums written rose 10.6% year over year to $1.4 billion, banking on a rising excess and surplus market as well as a favorable impact from two renewal rights transactions.
Net investment income came in at $123 million in the quarter under consideration, slipping 1% year over year. Negative returns from certain partnership investments and lower dividend income were mainly responsible for this downside.
Total costs and expenses escalated 28.2% to $1.7 billion.
Alleghany Corporation Price, Consensus and EPS Surprise
Reinsurance Segment: Net premiums written improved 11.1% to $1.4 billion owing to TransRe’s purchase during the period of certain renewal rights related to a block of U.S. treaty reinsurance. However, the same was offset to an extent by a decrease in net premiums written in relation to a large whole account quota share treaty plus an effect of changes in forex rates.
The segment's underwriting profit plunged 59.5% year over year to $40 million.Also, the segment’s first-quarter combined ratio expanded 640 basis points (bps) to 96.1%%.
Insurance Segment: Net premiums written rose 8.5% year over year in this segment owing to a robust contribution from CapSpecialty and RSUI.
Underwriting profit of $44.7 million surged 39.3% year over year. The combined ratio of this reported segment contracted 360 bps to 83.4%.
Financial Update
Alleghany exited the first quarter with $778 million cash, down 25% from the figure at 2018 end.
Senior notes and other debt inched up 0.4% from the level at 2018 end.
Alleghany’s shareholder equity at the end of the first quarter increased 7.1% to $8.2 billion from the level as of Dec 31, 2018.
Book value per share was $570.09 as of Mar 31, 2019, up 8% from the level as of Dec 31, 2018.
Share Repurchase Update
In the quarter under discussion, Alleghany bought back shares worth $80.5 million. As of Mar 31, 2019, the company had $191. million remaining under its share repurchase authorization.
Among other players from the insurance industry having reported first-quarter earnings so far, the bottom-line figures of The Travelers Companies, Inc. (TRV - Free Report) , Cincinnati Financial Corporation (CINF - Free Report) and The Progressive Corporation (PGR - Free Report) beat the respective Zacks Consensus Estimate.
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Alleghany's (Y) Q1 Earnings Surpass Estimates, Down Y/Y
Alleghany Corporation delivered first-quarter 2019 operating earnings of $9.66 per share, beating the Zacks Consensus Estimate by 32.5% on the back of higher revenues. However, the metric declined 14.1% year over year.
Operational Update
Revenues in the quarter improved 22.1% year over year to $1.9 billion, supported by solid organic growth and the buyout of Concord along with robust results in the company’s certain business lines.
Net premiums written rose 10.6% year over year to $1.4 billion, banking on a rising excess and surplus market as well as a favorable impact from two renewal rights transactions.
Net investment income came in at $123 million in the quarter under consideration, slipping 1% year over year. Negative returns from certain partnership investments and lower dividend income were mainly responsible for this downside.
Total costs and expenses escalated 28.2% to $1.7 billion.
Alleghany Corporation Price, Consensus and EPS Surprise
Alleghany Corporation Price, Consensus and EPS Surprise | Alleghany Corporation Quote
Segment Update
Reinsurance Segment: Net premiums written improved 11.1% to $1.4 billion owing to TransRe’s purchase during the period of certain renewal rights related to a block of U.S. treaty reinsurance. However, the same was offset to an extent by a decrease in net premiums written in relation to a large whole account quota share treaty plus an effect of changes in forex rates.
The segment's underwriting profit plunged 59.5% year over year to $40 million.Also, the segment’s first-quarter combined ratio expanded 640 basis points (bps) to 96.1%%.
Insurance Segment: Net premiums written rose 8.5% year over year in this segment owing to a robust contribution from CapSpecialty and RSUI.
Underwriting profit of $44.7 million surged 39.3% year over year. The combined ratio of this reported segment contracted 360 bps to 83.4%.
Financial Update
Alleghany exited the first quarter with $778 million cash, down 25% from the figure at 2018 end.
Senior notes and other debt inched up 0.4% from the level at 2018 end.
Alleghany’s shareholder equity at the end of the first quarter increased 7.1% to $8.2 billion from the level as of Dec 31, 2018.
Book value per share was $570.09 as of Mar 31, 2019, up 8% from the level as of Dec 31, 2018.
Share Repurchase Update
In the quarter under discussion, Alleghany bought back shares worth $80.5 million. As of Mar 31, 2019, the company had $191. million remaining under its share repurchase authorization.
Zacks Rank
Alleghany carries a Zacks Rank #3 (Hold). 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 first-quarter earnings so far, the bottom-line figures of The Travelers Companies, Inc. (TRV - Free Report) , Cincinnati Financial Corporation (CINF - Free Report) and The Progressive Corporation (PGR - Free Report) beat the respective Zacks Consensus Estimate.
This Could Be the Fastest Way to Grow Wealth in 2019
Research indicates one sector is poised to deliver a crop of the best-performing stocks you'll find anywhere in the market. Breaking news in this space frequently creates quick double- and triple-digit profit opportunities.
These companies are changing the world – and owning their stocks could transform your portfolio in 2019 and beyond. Recent trades from this sector have generated +98%, +119% and +164% gains in as little as 1 month.
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