AXIS Capital Holdings Limited (AXS - Free Report) reported second-quarter 2017 earnings of $1.31 per share that surpassed the Zacks Consensus Estimate by nearly 4%. Also, earnings skyrocketed 157% from the year-ago quarter
Including net realized investment losses of 5 cents, foreign exchange losses of 43 cents, and bargain purchase gain of 18 cents, net income came in at $1.01per share, down about 22% year over year.
Axis Capital Holdings Limited Price, Consensus and EPS Surprise
Operational Update
Operating revenues of about $1.09 billion beat the Zacks Consensus Estimate of $1.05 million. Revenues increased 5% year over year.
Gross premiums written increased 3% year over year to about $1.4 billion. The improvement was driven by 6% higher premiums written in the Reinsurance segment and 2% higher premiums written in the Insurance segment.
Net investment income increased 16% year over year to $106 million driven bychange in fair value of alternative investments.
Total expense in the quarter increased 9% year over year to $1 billion due to higher acquisition costs and administrative expenses.
AXIS Capital’s underwriting income increased nearly six folds year over year to $57 million. Combined ratio improved 460 basis points (bps) to 97.6%. Catastrophe and weather-related pre-tax net losses were $41 million compared with $49 million in the year-ago quarter.
Segment Results
Insurance: Gross premiums written increased 2% year over year to $796 million owing to the acquisition of the aviation business of Aviael and a better performing liability line of business.
Net premiums earned increased 3% year over year to $493 million on premium growth in accident, health and property lines.
Underwriting loss of $0.5 million narrowed from the year-ago loss of $11.4 million. Combined ratio improved 30 bps to 100.2%.
Reinsurance: Gross premiums written in the quarter increased 6% year over year to $566 million, largely due to a higher level of premiums in the motor, catastrophe and property lines partially offset by a decline in the agriculture line.
Net premiums earned decreased 4% year over year to $487.6 million on premium growth in the agriculture line.
Underwriting income of $57.4 million increased from $21.2 million in the year-ago quarter. Combined ratio improved 710 bps year over year to 97.6%.
Financial Update
AXIS Capital exited the quarter with cash and cash equivalents of $728 million, down 30% from the 2016-end level.
Cash flow from operation was $185 million compared with $77 million in the year-ago quarter.
As of Jun 30, 2017, diluted book value per share was $60.45, up 5% year over year.
Operating return on equity was 8.6% compared with 3.6% in year-ago quarter.
Share Repurchase and Dividend Update
The company repurchased 2 million shares for $131 million. AXIS Capital has $739 million remaining authorization under the common shares’ repurchase program up to Dec 31, 2017. But it has been suspended due to the acquisition of Novae.
The company declared a dividend of 38 cents per common share.
Zacks Rank
Arch Capital Group presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Among other players from the insurance industry that have reported their second-quarter earnings, the bottom line at Brown & Brown, Inc. (BRO - Free Report) and Fidelity National Financial, Inc. (FNF - Free Report) beat their respective Zacks Consensus Estimate. The Progressive Corporation (PGR - Free Report) missed the same.
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AXIS Capital Holdings Limited (AXS - Free Report) reported second-quarter 2017 earnings of $1.31 per share that surpassed the Zacks Consensus Estimate by nearly 4%. Also, earnings skyrocketed 157% from the year-ago quarter
Including net realized investment losses of 5 cents, foreign exchange losses of 43 cents, and bargain purchase gain of 18 cents, net income came in at $1.01per share, down about 22% year over year.
Axis Capital Holdings Limited Price, Consensus and EPS Surprise
Operational Update
Operating revenues of about $1.09 billion beat the Zacks Consensus Estimate of $1.05 million. Revenues increased 5% year over year.
Gross premiums written increased 3% year over year to about $1.4 billion. The improvement was driven by 6% higher premiums written in the Reinsurance segment and 2% higher premiums written in the Insurance segment.
Net investment income increased 16% year over year to $106 million driven bychange in fair value of alternative investments.
Total expense in the quarter increased 9% year over year to $1 billion due to higher acquisition costs and administrative expenses.
AXIS Capital’s underwriting income increased nearly six folds year over year to $57 million. Combined ratio improved 460 basis points (bps) to 97.6%. Catastrophe and weather-related pre-tax net losses were $41 million compared with $49 million in the year-ago quarter.
Segment Results
Insurance: Gross premiums written increased 2% year over year to $796 million owing to the acquisition of the aviation business of Aviael and a better performing liability line of business.
Net premiums earned increased 3% year over year to $493 million on premium growth in accident, health and property lines.
Underwriting loss of $0.5 million narrowed from the year-ago loss of $11.4 million. Combined ratio improved 30 bps to 100.2%.
Reinsurance: Gross premiums written in the quarter increased 6% year over year to $566 million, largely due to a higher level of premiums in the motor, catastrophe and property lines partially offset by a decline in the agriculture line.
Net premiums earned decreased 4% year over year to $487.6 million on premium growth in the agriculture line.
Underwriting income of $57.4 million increased from $21.2 million in the year-ago quarter. Combined ratio improved 710 bps year over year to 97.6%.
Financial Update
AXIS Capital exited the quarter with cash and cash equivalents of $728 million, down 30% from the 2016-end level.
Cash flow from operation was $185 million compared with $77 million in the year-ago quarter.
As of Jun 30, 2017, diluted book value per share was $60.45, up 5% year over year.
Operating return on equity was 8.6% compared with 3.6% in year-ago quarter.
Share Repurchase and Dividend Update
The company repurchased 2 million shares for $131 million. AXIS Capital has $739 million remaining authorization under the common shares’ repurchase program up to Dec 31, 2017. But it has been suspended due to the acquisition of Novae.
The company declared a dividend of 38 cents per common share.
Zacks Rank
Arch Capital Group presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Among other players from the insurance industry that have reported their second-quarter earnings, the bottom line at Brown & Brown, Inc. (BRO - Free Report) and Fidelity National Financial, Inc. (FNF - Free Report) beat their respective Zacks Consensus Estimate. The Progressive Corporation (PGR - Free Report) missed the same.
More Stock News: Tech Opportunity Worth $386 Billion in 2017
From driverless cars to artificial intelligence, we've seen an unsurpassed growth of high-tech products in recent months. Yesterday's science-fiction is becoming today's reality. Despite all the innovation, there is a single component no tech company can survive without. Demand for this critical device will reach $387 billion this year alone, and it's likely to grow even faster in the future.
Zacks has released a brand-new Special Report to help you take advantage of this exciting investment opportunity. Most importantly, it reveals 4 stocks with massive profit potential.See these stocks now>>
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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