The Allstate Corporation (ALL - Free Report) reported second-quarter 2016 operating earnings per share of 62 cents, comfortably beating the Zacks Consensus Estimate of 53 cents. Reported earnings were, however, down 1.6% on a year-over-year basis.
The earnings outperformance came from higher premium in its property and liability segment plus higher contract charge and fees in the Allstate Financial segment. This was partly offset by high catastrophe loss incurred during the quarter.
Allstate’s total revenue increased 3% year over year to $9.1 billion. This was primarily due to growth in insurance premium and realized capital gains, which were to some extent offset by a decline in net investment income. The top line also exceeded the Zacks Consensus Estimate of $8.1 billion.
Property-liability (P&C) insurance claims and claim expenses rose 5.6% year over year to $5.9 billion, while operating expenses decreased 2% to $1.04 billion.
Net investment income of $762 million declined 3.5% year over year primarily due to lower interest income partially offset by higher dividends on equity securities and performance-based investment results.
During the quarter, the company incurred catastrophe losses of $961 million compared with $797 million in the year-ago quarter.
Quarter in Detail
Property-Liability’s net premiums were $7.8 billion, up 3.5% from the prior-year quarter. The segment’s operating income of $186 million in the second quarter of 2016 was 6.5% lower year over year. The segment sustained an underwriting loss of $66 million in the reported quarter, worse than $56 million reported in the prior-year quarter due to an increase in catastrophe losses and higher auto loss costs, partially offset by higher earned premium.
On the other hand, operating income for Allstate Financial decreased 3.7% to $120 million, due primarily to lower investment income resulting from portfolio repositioning in 2015 to deliver better long-term, risk-adjusted returns.
Capital Position
Total equity increased to $20.6 billion from $20 billion at 2015 end, while total assets increased to $107.3 billion from $104.7 billion from the same time period. Long-term debt was down a meager 0.3% to $5.1 billion from the 2015-end level.
Book value of $50.05 per share increased 4.4% year over year.
Stock Repurchase and Dividend Update
Overall, Allstate returned $1.07 billion worth of capital through share buybacks and dividend for the first half of 2016.
Zacks Rank & Performance of Other Players
Allstate carries a Zacks Rank #3 (Hold). The bottom line at The Travelers Companies, Inc. (TRV - Free Report) outperformed the Zacks Consensus Estimates while Chubb Limited (CB - Free Report) and RLI Corp. (RLI - Free Report) missed the same in the second quarter.
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The Allstate Corporation (ALL - Free Report) reported second-quarter 2016 operating earnings per share of 62 cents, comfortably beating the Zacks Consensus Estimate of 53 cents. Reported earnings were, however, down 1.6% on a year-over-year basis.
The earnings outperformance came from higher premium in its property and liability segment plus higher contract charge and fees in the Allstate Financial segment. This was partly offset by high catastrophe loss incurred during the quarter.
Allstate’s total revenue increased 3% year over year to $9.1 billion. This was primarily due to growth in insurance premium and realized capital gains, which were to some extent offset by a decline in net investment income. The top line also exceeded the Zacks Consensus Estimate of $8.1 billion.
Property-liability (P&C) insurance claims and claim expenses rose 5.6% year over year to $5.9 billion, while operating expenses decreased 2% to $1.04 billion.
Net investment income of $762 million declined 3.5% year over year primarily due to lower interest income partially offset by higher dividends on equity securities and performance-based investment results.
During the quarter, the company incurred catastrophe losses of $961 million compared with $797 million in the year-ago quarter.
Quarter in Detail
Property-Liability’s net premiums were $7.8 billion, up 3.5% from the prior-year quarter. The segment’s operating income of $186 million in the second quarter of 2016 was 6.5% lower year over year. The segment sustained an underwriting loss of $66 million in the reported quarter, worse than $56 million reported in the prior-year quarter due to an increase in catastrophe losses and higher auto loss costs, partially offset by higher earned premium.
On the other hand, operating income for Allstate Financial decreased 3.7% to $120 million, due primarily to lower investment income resulting from portfolio repositioning in 2015 to deliver better long-term, risk-adjusted returns.
Capital Position
Total equity increased to $20.6 billion from $20 billion at 2015 end, while total assets increased to $107.3 billion from $104.7 billion from the same time period. Long-term debt was down a meager 0.3% to $5.1 billion from the 2015-end level.
Book value of $50.05 per share increased 4.4% year over year.
Stock Repurchase and Dividend Update
Overall, Allstate returned $1.07 billion worth of capital through share buybacks and dividend for the first half of 2016.
Zacks Rank & Performance of Other Players
Allstate carries a Zacks Rank #3 (Hold). The bottom line at The Travelers Companies, Inc. (TRV - Free Report) outperformed the Zacks Consensus Estimates while Chubb Limited (CB - Free Report) and RLI Corp. (RLI - Free Report) missed the same in the second quarter.
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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