The Progressive Corporation’s (PGR - Free Report) second-quarter 2023 earnings per share of 50 cents missed the Zacks Consensus Estimate of 88 cents. The bottom line declined 47.4% year over year.
Shares lost 5.6% in the pre-market trading session, reflecting the earnings underperformance.
Behind the Headlines
Net premiums written were $14.7 billion in the quarter, rising 18% from $13.2 billion a year ago and beating our estimate of $13.5 billion.
Net premiums earned grew 19% to $14.5 billion and beat our estimate of $12.9 billion as well as the Zacks Consensus Estimate of 14.3 billion.
Net realized gains on securities were $126.9 billion against a loss of $1.1 billion in the year-ago quarter.
The combined ratio — the percentage of premiums paid out as claims and expenses — deteriorated 480 basis points (bps) from the prior-year quarter’s level to 104.
June Policies in Force
Operating revenues were about $4.8 billion, up 20.3% year over year. This improvement was driven by a 19.8% increase in premiums, 26.3% higher fees and other revenues, a 7.1% increase in service revenues and 38.6% higher investment income.
Total expenses increased 24.7% year over year to $4.9 billion due to 38.9% higher losses and loss adjustment expenses and 35.3% higher policy acquisition costs.
Policies in force were solid in the Personal Auto segment, increasing 17% from the year-ago month’s figure to 19.7 million. Special Lines improved 7% to 5.8 million.
In Progressive’s Personal Auto segment, Direct Auto increased 17% year over year to 11.2 million, while Agency Auto increased 11% to 8.4 million.
Progressive’s Commercial Auto segment rose 7% year over year to 1.1 million. The Property business had 2.8 million policies in force, up 5%.
Financial Update
Progressive’s book value per share was $27.71 as of Jun 30, 2023, down 4.4% from $29.00 on Jun 30, 2022.
Return on equity in June 2023 was 8%, down 1870 basis points (bps) year over year. The total debt-to-total capital ratio deteriorated 328 bps to 29.2.
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
Arch Capital Group (ACGL - Free Report) will report second-quarter 2023 results on Jul 26. The Zacks Consensus Estimate for the second quarter is pegged at $1.65, suggesting an increase of 23.1% from the year-ago quarter’s reported figure.
ACGL’s earnings beat estimates in the last four quarters.
Kinsale Capital Group (KNSL - Free Report) will report second-quarter 2023 results on Jul 27. The Zacks Consensus Estimate for the second quarter is pegged at $2.55, suggesting an increase of 32.8% from the year-ago quarter’s reported figure.
KNSL’s earnings beat estimates in the last four quarters.
RLI Corporation (RLI - Free Report) will report second-quarter 2023 results on Jul 24. The Zacks Consensus Estimate for the second quarter is pegged at $1.20, suggesting a decrease of 19.5% from the year-ago quarter’s reported figure.
RLI’s earnings beat estimates in the last four quarters.
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The Progressive Corporation’s (PGR - Free Report) second-quarter 2023 earnings per share of 50 cents missed the Zacks Consensus Estimate of 88 cents. The bottom line declined 47.4% year over year.
Shares lost 5.6% in the pre-market trading session, reflecting the earnings underperformance.
Behind the Headlines
Net premiums written were $14.7 billion in the quarter, rising 18% from $13.2 billion a year ago and beating our estimate of $13.5 billion.
Net premiums earned grew 19% to $14.5 billion and beat our estimate of $12.9 billion as well as the Zacks Consensus Estimate of 14.3 billion.
Net realized gains on securities were $126.9 billion against a loss of $1.1 billion in the year-ago quarter.
The combined ratio — the percentage of premiums paid out as claims and expenses — deteriorated 480 basis points (bps) from the prior-year quarter’s level to 104.
June Policies in Force
Operating revenues were about $4.8 billion, up 20.3% year over year. This improvement was driven by a 19.8% increase in premiums, 26.3% higher fees and other revenues, a 7.1% increase in service revenues and 38.6% higher investment income.
Total expenses increased 24.7% year over year to $4.9 billion due to 38.9% higher losses and loss adjustment expenses and 35.3% higher policy acquisition costs.
Policies in force were solid in the Personal Auto segment, increasing 17% from the year-ago month’s figure to 19.7 million. Special Lines improved 7% to 5.8 million.
In Progressive’s Personal Auto segment, Direct Auto increased 17% year over year to 11.2 million, while Agency Auto increased 11% to 8.4 million.
Progressive’s Commercial Auto segment rose 7% year over year to 1.1 million. The Property business had 2.8 million policies in force, up 5%.
Financial Update
Progressive’s book value per share was $27.71 as of Jun 30, 2023, down 4.4% from $29.00 on Jun 30, 2022.
Return on equity in June 2023 was 8%, down 1870 basis points (bps) year over year. The total debt-to-total capital ratio deteriorated 328 bps to 29.2.
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
Arch Capital Group (ACGL - Free Report) will report second-quarter 2023 results on Jul 26. The Zacks Consensus Estimate for the second quarter is pegged at $1.65, suggesting an increase of 23.1% from the year-ago quarter’s reported figure.
ACGL’s earnings beat estimates in the last four quarters.
Kinsale Capital Group (KNSL - Free Report) will report second-quarter 2023 results on Jul 27. The Zacks Consensus Estimate for the second quarter is pegged at $2.55, suggesting an increase of 32.8% from the year-ago quarter’s reported figure.
KNSL’s earnings beat estimates in the last four quarters.
RLI Corporation (RLI - Free Report) will report second-quarter 2023 results on Jul 24. The Zacks Consensus Estimate for the second quarter is pegged at $1.20, suggesting a decrease of 19.5% from the year-ago quarter’s reported figure.
RLI’s earnings beat estimates in the last four quarters.
Zacks Names "Single Best Pick to Double"
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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