Back to top

Image: Bigstock

Erie Indemnity (ERIE) Q2 Earnings & Revenues Beat Estimates

Read MoreHide Full Article

Erie Indemnity Company’s (ERIE - Free Report) second-quarter 2020 operating income of $1.57 per share beat the Zacks Consensus Estimate by 6.1%. However, the bottom line decreased 6.5% year over year.

The company witnessed lower net investment income and increased operating expenses, which were offset by increased direct written premium.

Erie Indemnity Company Price, Consensus and EPS Surprise

Erie Indemnity Company Price, Consensus and EPS Surprise

Behind the Headlines

Operating revenues came in at $657 million, up 5.5% year over year, due to higher management fee revenue - policy issuance and renewal services, as well as management fee revenue - administrative services and administrative services reimbursement revenues. Moreover, the top line beat the consensus estimate by 5.4%.

Net investment income decreased 8.2% year over year to $7.4 million. Income from investments before taxes increased 19.7% year over year to $11.6 million.

Total operating expenses increased 2.7% to $565.8 million, primarily due to higher policy issuance, renewal services and administrative services.

Total direct written premium of Property and Casualty group increased 0.5% to $2 billion on the back of higher premiums from homeowners, commercial multi-peril, commercial auto and all other lines of business.

Retention trends in Total personal lines contracted 40 basis points (bps) to 90.3% and that of Total commercial lines expanded 40 bps to 87.2%.

Financial Update

Cash and cash equivalents at quarter end decreased 23.5% from 2019 level to $257.7 million.

Erie Indemnity exited the second quarter with total assets worth $2.1 billion, up 3.3% from year-end 2019.

Shareholders’ equity increased 5.4% from the level as of Dec 31, 2019 to $1.2 billion as of Jun 30, 2020.

Zacks Rank

Erie Indemnity currently 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

Of the insurance industry players, which have reported second-quarter results so far, earnings of Cincinnati Financial Corporation (CINF - Free Report) , First American Financial Corporation (FAF - Free Report) and AXIS Capital Holdings Limited (AXS - Free Report) beat the respective Zacks Consensus Estimate.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>