Progressive Corp.’s (PGR - Free Report) operating earnings for Jul 2016 came in at 10 cents per share, down 44% from 18 cents earned in the year-ago month. Though revenues improved, a higher magnitude of expense increase weighed on the bottom line.
July Numbers
Progressive recorded $2.3 billion net premiums written, up 13% from $2 billion in the year-ago month. Net premiums earned of $2.2 billion soared 13% from the year-ago comparable period.
Combined ratio, deteriorated 420 basis points (bps) from the prior-year month to 97.3%.
In July, policies in force were healthy, with the Personal Auto segment increasing 8% year over year to 10.3 million. Special Lines rose 3% year over year to 4.3 million.
In Progressive's Personal Auto segment, Direct Auto improved 12% year over year to 5.3 million policies and Agency Auto increased 5% to nearly 5 million. Progressive’s Commercial Auto segment showed a 12% improvement to 0.6 million policies on a year-over-year basis. The Property business had about 1.8 million policies in force in the reported month, up 11% year over year.
Total revenue grew 18% year over year to $2.4 billion, largely driven by higher service revenues (up 9% year over year), fees revenues (up 12%), premiums (up 18%) and investment income (up 11%).
On the other hand, total expense increased 17.4% year over year to $2.4 billion in July. The major factors behind the rise in total expense were a 12.4% increase in policy acquisition costs, 6% higher other underwriting expenses, and a 20.3% increase in losses and loss-adjustment expenses.
Progressive reported book value per share of $13.76 on Jul 31, 2016, up 7.6% year over year.
Return on equity on a trailing 12-month basis was 15.2%, down 250 bps year over year. The debt-to-total capital ratio improved 170 bps from the prior-year level to 24.9% as of Jul 31.
Zacks Rank
Progressive carries a Zacks Rank #4 (Sell). Some better-ranked property and casualty insurers are National General Holdings Corp. (AWH - Free Report) , Argo Group International Holdings, Ltd. and National Interstate Corporation (NATL - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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 >>
Progressive Corp.’s (PGR - Free Report) operating earnings for Jul 2016 came in at 10 cents per share, down 44% from 18 cents earned in the year-ago month. Though revenues improved, a higher magnitude of expense increase weighed on the bottom line.
July Numbers
Progressive recorded $2.3 billion net premiums written, up 13% from $2 billion in the year-ago month. Net premiums earned of $2.2 billion soared 13% from the year-ago comparable period.
Combined ratio, deteriorated 420 basis points (bps) from the prior-year month to 97.3%.
In July, policies in force were healthy, with the Personal Auto segment increasing 8% year over year to 10.3 million. Special Lines rose 3% year over year to 4.3 million.
In Progressive's Personal Auto segment, Direct Auto improved 12% year over year to 5.3 million policies and Agency Auto increased 5% to nearly 5 million. Progressive’s Commercial Auto segment showed a 12% improvement to 0.6 million policies on a year-over-year basis. The Property business had about 1.8 million policies in force in the reported month, up 11% year over year.
Total revenue grew 18% year over year to $2.4 billion, largely driven by higher service revenues (up 9% year over year), fees revenues (up 12%), premiums (up 18%) and investment income (up 11%).
On the other hand, total expense increased 17.4% year over year to $2.4 billion in July. The major factors behind the rise in total expense were a 12.4% increase in policy acquisition costs, 6% higher other underwriting expenses, and a 20.3% increase in losses and loss-adjustment expenses.
Progressive reported book value per share of $13.76 on Jul 31, 2016, up 7.6% year over year.
Return on equity on a trailing 12-month basis was 15.2%, down 250 bps year over year. The debt-to-total capital ratio improved 170 bps from the prior-year level to 24.9% as of Jul 31.
Zacks Rank
Progressive carries a Zacks Rank #4 (Sell). Some better-ranked property and casualty insurers are National General Holdings Corp. (AWH - Free Report) , Argo Group International Holdings, Ltd. and National Interstate Corporation (NATL - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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 >>
Get the latest research report on PGR - FREE
Get the latest research report on AWH - FREE
Get the latest research report on NATL - FREE