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Palomar (PLMR) Surpasses Q2 Earnings and Revenue Estimates
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Palomar Holdings, Inc.’s (PLMR - Free Report) second-quarter 2020 operating earnings of 52 cents per share beat the Zacks Consensus Estimate by 8.3% and improved 44.4% from the prior-year quarter.
Palomar witnessed improved premiums along with increase in net investment income and underwriting income in the reported quarter.
Palomar Holdings, Inc. Price, Consensus and EPS Surprise
Total revenues improved 68% year over year to $42 million, mainly attributable to higher premiums, net investment income and commission and other income. Moreover, the top line exceeded the Zacks Consensus Estimate by 8.1%
Gross written premiums increased 43.6% year over year to $83.8 million. Net written premiums grew 59% year over year to $53.6 million owing to an increase in gross written premiums.
Net investment income increased 42.5% year over year to $2.1 million. The increase was primarily due to a higher average balance of investments held during the three months ended Jun 30, 2020, due primarily to proceeds from the company’s April 2019 IPO, investing of cash generated from operations and proceeds from the company’s January 2020 secondary offering.
Palomar witnessed underwriting gain of $12.4 million, up 73.7% from the year-earlier period.
Total expenses increased 59.8% to $27.8 million, mainly due to higher losses and loss adjustment expenses, acquisition expenses and other underwriting expenses.
Adjusted combined ratio deteriorated 130 basis points (bps) year over year to 65.1%.
Financial Update
As of Jun 30, 2020, Palomar Holdings had assets worth $584 million, up 47.7% from the level at 2019 end.
Cash and cash equivalents surged 230% from 2019-end level to about $109.3 million.
Shareholder equity at the end of the reported quarter increased 71.6% from 2019-end to $375.2 million.
Annualized adjusted return on equity was 16.4% in the second quarter of 2020, reflecting a contraction of 480 bps year over year.
2020 Outlook
Palomar Holdings affirmed its prior guidance of adjusted net income of $50.5 to $53.0 million, equating to a growth rate of 33% to 40% from 2019.
Of the insurance industry players, which have reported second-quarter results so far, earnings of Arthur J. Gallagher & Co. (AJG - Free Report) , Reinsurance Group of America, Incorporated (RGA - Free Report) and AXIS Capital Holdings Limited (AXS - Free Report) beat the respective Zacks Consensus Estimate.
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Palomar (PLMR) Surpasses Q2 Earnings and Revenue Estimates
Palomar Holdings, Inc.’s (PLMR - Free Report) second-quarter 2020 operating earnings of 52 cents per share beat the Zacks Consensus Estimate by 8.3% and improved 44.4% from the prior-year quarter.
Palomar witnessed improved premiums along with increase in net investment income and underwriting income in the reported quarter.
Palomar Holdings, Inc. Price, Consensus and EPS Surprise
Palomar Holdings, Inc. price-consensus-eps-surprise-chart | Palomar Holdings, Inc. Quote
Behind the Q2 Headlines
Total revenues improved 68% year over year to $42 million, mainly attributable to higher premiums, net investment income and commission and other income. Moreover, the top line exceeded the Zacks Consensus Estimate by 8.1%
Gross written premiums increased 43.6% year over year to $83.8 million. Net written premiums grew 59% year over year to $53.6 million owing to an increase in gross written premiums.
Net investment income increased 42.5% year over year to $2.1 million. The increase was primarily due to a higher average balance of investments held during the three months ended Jun 30, 2020, due primarily to proceeds from the company’s April 2019 IPO, investing of cash generated from operations and proceeds from the company’s January 2020 secondary offering.
Palomar witnessed underwriting gain of $12.4 million, up 73.7% from the year-earlier period.
Total expenses increased 59.8% to $27.8 million, mainly due to higher losses and loss adjustment expenses, acquisition expenses and other underwriting expenses.
Adjusted combined ratio deteriorated 130 basis points (bps) year over year to 65.1%.
Financial Update
As of Jun 30, 2020, Palomar Holdings had assets worth $584 million, up 47.7% from the level at 2019 end.
Cash and cash equivalents surged 230% from 2019-end level to about $109.3 million.
Shareholder equity at the end of the reported quarter increased 71.6% from 2019-end to $375.2 million.
Annualized adjusted return on equity was 16.4% in the second quarter of 2020, reflecting a contraction of 480 bps year over year.
2020 Outlook
Palomar Holdings affirmed its prior guidance of adjusted net income of $50.5 to $53.0 million, equating to a growth rate of 33% to 40% from 2019.
Zacks Rank
Palomar Holdings 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 Arthur J. Gallagher & Co. (AJG - Free Report) , Reinsurance Group of America, Incorporated (RGA - Free Report) and AXIS Capital Holdings Limited (AXS - Free Report) beat the respective Zacks Consensus Estimate.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>