RLI Corporation’s (RLI - Free Report) second-quarter 2016 operating earnings of 61 cents per share missed the Zacks Consensus Estimate by 3.2%. The bottom line also deteriorated by 20.8% year over year.
The earnings decline is attributable to a decrease in underwriting income.
Including realized gains of 4 cents, net income plunged 22.6% year over year to 65 cents.
Operational Performance
Operating revenues totaled $193 million, up 4.3% year over year. The top line, however, missed the Zacks Consensus Estimate of $196 million by 1.5%.
Gross premiums written inched up 1% year over year to $250.6 million on strong performances by the Casualty and Surety segments. However, the upside was limited by weakness in the Property segment.
Total expense increased 11.8% year over year to $158.8 million due to higher loss and settlement expenses, policy acquisition costs and general corporate expenses.
Underwriting income of this property and casualty insurer totaled $26 million, down 25% year over year. Underwriting income decreased due to soft income from Casualty and Surety. Combined ratio deteriorated 570 basis points year over year.
RLI Corp.’s net investment income declined 2.9% year over year to $13 million. Total return in the investment portfolio was 2.8%, while bond portfolio retuned 2.4%. Equity portfolio returned 4.4%.
Financial Update
RLI Corp. exited the second quarter with total investments and cash of $2.09 billion, up 7.5% from year-end 2015.
Book value was $20.87 per share as of Jun 30, 2016, up 10.4% from that as of Dec 31, 2015.
Long-term debt was $148 million, flat with 2015-end level.
Statutory surplus increased 6.8% year over year to $924 million.
Dividend Payout
RLI Corp. paid quarterly dividend of 20 cents per share. The insurer has paid more than $641 million over last five years.
We wait to see how the stock fares in the trading session following both earnings and revenue miss.
Zacks Rank and Stocks to Consider
RLI Corp. presently carries a Zacks Rank #3 (Hold). Among the other players from the insurance industry that have reported their second-quarter earnings so far, the bottom line at Brown & Brown Inc.’s (BRO - Free Report) and MGIC Investment Corp. (MTG - Free Report) beat their respective Zacks Consensus Estimates, while Progressive Corp.’s earnings (PGR - Free Report) miss the same.
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RLI Corporation’s (RLI - Free Report) second-quarter 2016 operating earnings of 61 cents per share missed the Zacks Consensus Estimate by 3.2%. The bottom line also deteriorated by 20.8% year over year.
The earnings decline is attributable to a decrease in underwriting income.
Including realized gains of 4 cents, net income plunged 22.6% year over year to 65 cents.
Operational Performance
Operating revenues totaled $193 million, up 4.3% year over year. The top line, however, missed the Zacks Consensus Estimate of $196 million by 1.5%.
Gross premiums written inched up 1% year over year to $250.6 million on strong performances by the Casualty and Surety segments. However, the upside was limited by weakness in the Property segment.
Total expense increased 11.8% year over year to $158.8 million due to higher loss and settlement expenses, policy acquisition costs and general corporate expenses.
Underwriting income of this property and casualty insurer totaled $26 million, down 25% year over year. Underwriting income decreased due to soft income from Casualty and Surety. Combined ratio deteriorated 570 basis points year over year.
RLI Corp.’s net investment income declined 2.9% year over year to $13 million. Total return in the investment portfolio was 2.8%, while bond portfolio retuned 2.4%. Equity portfolio returned 4.4%.
Financial Update
RLI Corp. exited the second quarter with total investments and cash of $2.09 billion, up 7.5% from year-end 2015.
Book value was $20.87 per share as of Jun 30, 2016, up 10.4% from that as of Dec 31, 2015.
Long-term debt was $148 million, flat with 2015-end level.
Statutory surplus increased 6.8% year over year to $924 million.
Dividend Payout
RLI Corp. paid quarterly dividend of 20 cents per share. The insurer has paid more than $641 million over last five years.
We wait to see how the stock fares in the trading session following both earnings and revenue miss.
Zacks Rank and Stocks to Consider
RLI Corp. presently carries a Zacks Rank #3 (Hold). Among the other players from the insurance industry that have reported their second-quarter earnings so far, the bottom line at Brown & Brown Inc.’s (BRO - Free Report) and MGIC Investment Corp. (MTG - Free Report) beat their respective Zacks Consensus Estimates, while Progressive Corp.’s earnings (PGR - Free Report) miss the same.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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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