The Progressive Corporation’s (PGR - Free Report) first-quarter 2023 earnings per share of 65 cents missed the Zacks Consensus Estimate of $1.44 as well as our estimate of $1.50. The bottom line declined 20.7% year over year.
Shares lost 4.4% in the pre-market trading session, reflecting the earnings underperformance.
The Progressive Corporation Price, Consensus and EPS Surprise
Behind the Headlines
Net premiums written were $16.1 billion in the quarter, rising 22% from $13.2 billion a year ago and beating our estimate of $14.6 billion.
Net premiums earned grew 15% to $13.5 billion and beat our estimate of $12.6 billion.
Net realized gains on securities were $71.8 billion compared with a gain of $445.3 million in the year-ago quarter.
Operating revenues were about $14.2 billion, up 15.8% year over year. This improvement was driven by a 15% increase in premiums, 18.5% higher fees and other revenues, a 7.1% increase in service revenues and 73.2% higher investment income. The top line exceeded the Zacks Consensus Estimate of $14.1 billion and our estimate of $13.1 billion.
Total expenses increased 20% year over year to $13.7 billion due to 20% higher losses and loss adjustment expenses, 16% higher policy acquisition costs and a 23% rise in other underwriting expenses. Our estimate was $12 billion.
The combined ratio — the percentage of premiums paid out as claims and expenses — deteriorated 450 basis points (bps) from the prior-year quarter’s level to 99.
March Policies in Force
Policies in force were solid in the Personal Auto segment, increasing 11% from the year-ago month’s figure to 19.2 million. Special Lines improved 5% to 5.6 million.
In Progressive’s Personal Auto segment, Direct Auto increased 15% year over year to 11 million, while Agency Auto increased 5% to 8.2 million.
Progressive’s Commercial Auto segment rose 7% year over year to 1.1 million. The Property business had 2.9 million policies in force, up 4%.
Financial Update
Progressive’s book value per share was $26.32 as of Mar 31, 2023, down 1.2% from $28.31 on Mar 31, 2022.
Return on equity in March 2023 was 0.1%, down 200 basis points (bps) year over year. The total debt-to-total capital ratio deteriorated 30 bps to 27.5.
Zacks Rank
Progressive currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
W.R. Berkley Corporation (WRB - Free Report) will report first-quarter 2023 earnings on Apr 20. The Zacks Consensus Estimate for the first quarter is pegged at $1.20, suggesting an increase of 9.1% from the year-ago quarter’s reported figure.
WRB’s bottom line beat estimates in the last four quarters.
The Travelers Companies, Inc. (TRV - Free Report) will report first-quarter 2023 earnings on Apr 19. The Zacks Consensus Estimate for the first quarter is pegged at $3.74, suggesting a decrease of 11.4% from the year-ago quarter’s reported figure.
TRV’s bottom line beat estimates in the last four quarters.
RLI Corporation (RLI - Free Report) will report first-quarter 2023 earnings on Apr 19. The Zacks Consensus Estimate for the first quarter is pegged at $1.21, suggesting a decrease of 15.4% from the year-ago quarter’s reported figure.
RLI’s bottom line beat estimates in the last four quarters.
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The Progressive Corporation’s (PGR - Free Report) first-quarter 2023 earnings per share of 65 cents missed the Zacks Consensus Estimate of $1.44 as well as our estimate of $1.50. The bottom line declined 20.7% year over year.
Shares lost 4.4% in the pre-market trading session, reflecting the earnings underperformance.
The Progressive Corporation Price, Consensus and EPS Surprise
Behind the Headlines
Net premiums written were $16.1 billion in the quarter, rising 22% from $13.2 billion a year ago and beating our estimate of $14.6 billion.
Net premiums earned grew 15% to $13.5 billion and beat our estimate of $12.6 billion.
Net realized gains on securities were $71.8 billion compared with a gain of $445.3 million in the year-ago quarter.
Operating revenues were about $14.2 billion, up 15.8% year over year. This improvement was driven by a 15% increase in premiums, 18.5% higher fees and other revenues, a 7.1% increase in service revenues and 73.2% higher investment income. The top line exceeded the Zacks Consensus Estimate of $14.1 billion and our estimate of $13.1 billion.
Total expenses increased 20% year over year to $13.7 billion due to 20% higher losses and loss adjustment expenses, 16% higher policy acquisition costs and a 23% rise in other underwriting expenses. Our estimate was $12 billion.
The combined ratio — the percentage of premiums paid out as claims and expenses — deteriorated 450 basis points (bps) from the prior-year quarter’s level to 99.
March Policies in Force
Policies in force were solid in the Personal Auto segment, increasing 11% from the year-ago month’s figure to 19.2 million. Special Lines improved 5% to 5.6 million.
In Progressive’s Personal Auto segment, Direct Auto increased 15% year over year to 11 million, while Agency Auto increased 5% to 8.2 million.
Progressive’s Commercial Auto segment rose 7% year over year to 1.1 million. The Property business had 2.9 million policies in force, up 4%.
Financial Update
Progressive’s book value per share was $26.32 as of Mar 31, 2023, down 1.2% from $28.31 on Mar 31, 2022.
Return on equity in March 2023 was 0.1%, down 200 basis points (bps) year over year. The total debt-to-total capital ratio deteriorated 30 bps to 27.5.
Zacks Rank
Progressive currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
W.R. Berkley Corporation (WRB - Free Report) will report first-quarter 2023 earnings on Apr 20. The Zacks Consensus Estimate for the first quarter is pegged at $1.20, suggesting an increase of 9.1% from the year-ago quarter’s reported figure.
WRB’s bottom line beat estimates in the last four quarters.
The Travelers Companies, Inc. (TRV - Free Report) will report first-quarter 2023 earnings on Apr 19. The Zacks Consensus Estimate for the first quarter is pegged at $3.74, suggesting a decrease of 11.4% from the year-ago quarter’s reported figure.
TRV’s bottom line beat estimates in the last four quarters.
RLI Corporation (RLI - Free Report) will report first-quarter 2023 earnings on Apr 19. The Zacks Consensus Estimate for the first quarter is pegged at $1.21, suggesting a decrease of 15.4% from the year-ago quarter’s reported figure.
RLI’s bottom line beat estimates in the last four quarters.
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From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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