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Why Is CNA Financial (CNA) Up 4.5% Since Last Earnings Report?
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A month has gone by since the last earnings report for CNA Financial (CNA - Free Report) . Shares have added about 4.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CNA Financial due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
CNA Financial Q4 Earnings and Revenues Beat, Rise Y/Y
CNA Financial reported fourth-quarter 2020 core earnings of $1.23 per share, which beat the Zacks Consensus Estimate by 16%. The bottom line also increased 26.8% year over year.
The quarter witnessed higher premiums across most of its segments and increased net investment income, which were partially offset by elevated expenses.
Behind Fourth-Quarter Headlines
Total operating revenues of CNA Financial were nearly $2.5 billion, up 3.4% year over year on the back of higher net investment income and premiums. The top line beat the Zacks Consensus Estimate by 1.3%.
Net written premiums at Property & Casualty Operations improved 12% year over year to about $2 billion, driven by strong rate and higher new business.
Net investment income increased 1.8% year over year to $555 million, driven by limited partnership and common stock investments, partially offset by lower yields in fixed income portfolio.
Total claims, benefits and expenses increased 0.5% to $2.5 billion, primarily due to higher amortization of deferred acquisition costs and non-insurance warranty expense.
Combined ratio improved 210 basis points (bps) year over year to 93.5.
Segment Results
Specialty’s net written premiums rose nearly 15% year over year to $883 million, driven by strong rate and higher new business. Combined ratio deteriorated 120 bps to 89.4%.
Commercial’s net written premiums increased 11% year over year to $975 million, driven by higher new business and favorable rate. Combined ratio improved 440 bps to 96.2%.
International’s net written premiums increased 7% year over year to $311 million, driven by growth in Europe and Canada. Combined ratio improved 340 bps to 96.9%.
Life & Group’s Net earned premiums were $124 million, down 4.6% year over year. Core income of $26 million rebounded from year-ago loss of $4 million.
Corporate & Other’s core loss of $16 million was narrower than loss of $68 million in the year-earlier quarter.
Full-Year Highlights
Full-year 2020 core income of $2.70 per share beat the Zacks Consensus Estimate of $2.53. The bottom line decreased 25% year over year.
Total revenues increased 0.3% to about $9.6 billion and beat the Zacks Consensus Estimate by 0.3%
Combined ratio deteriorated 420 bps year over year to 100.9.
Core return on equity was 6.1%, down 200 bps.
Debt-to-capital improved 10 bps o 17.9% at year end.
Book value as of Dec 31, 2020 was $46.82 per share, up 6% from Dec 31, 2019.
Dividend Update
CNA Financial’s board of directors approved a quarterly dividend of 38 cents, reflecting a 3% increase from the earlier payout. It also paid a special dividend of 75 cents per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
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Why Is CNA Financial (CNA) Up 4.5% Since Last Earnings Report?
A month has gone by since the last earnings report for CNA Financial (CNA - Free Report) . Shares have added about 4.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CNA Financial due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
CNA Financial Q4 Earnings and Revenues Beat, Rise Y/Y
CNA Financial reported fourth-quarter 2020 core earnings of $1.23 per share, which beat the Zacks Consensus Estimate by 16%. The bottom line also increased 26.8% year over year.
The quarter witnessed higher premiums across most of its segments and increased net investment income, which were partially offset by elevated expenses.
Behind Fourth-Quarter Headlines
Total operating revenues of CNA Financial were nearly $2.5 billion, up 3.4% year over year on the back of higher net investment income and premiums. The top line beat the Zacks Consensus Estimate by 1.3%.
Net written premiums at Property & Casualty Operations improved 12% year over year to about $2 billion, driven by strong rate and higher new business.
Net investment income increased 1.8% year over year to $555 million, driven by limited partnership and common stock investments, partially offset by lower yields in fixed income portfolio.
Total claims, benefits and expenses increased 0.5% to $2.5 billion, primarily due to higher amortization of deferred acquisition costs and non-insurance warranty expense.
Combined ratio improved 210 basis points (bps) year over year to 93.5.
Segment Results
Specialty’s net written premiums rose nearly 15% year over year to $883 million, driven by strong rate and higher new business. Combined ratio deteriorated 120 bps to 89.4%.
Commercial’s net written premiums increased 11% year over year to $975 million, driven by higher new business and favorable rate. Combined ratio improved 440 bps to 96.2%.
International’s net written premiums increased 7% year over year to $311 million, driven by growth in Europe and Canada. Combined ratio improved 340 bps to 96.9%.
Life & Group’s Net earned premiums were $124 million, down 4.6% year over year. Core income of $26 million rebounded from year-ago loss of $4 million.
Corporate & Other’s core loss of $16 million was narrower than loss of $68 million in the year-earlier quarter.
Full-Year Highlights
Full-year 2020 core income of $2.70 per share beat the Zacks Consensus Estimate of $2.53. The bottom line decreased 25% year over year.
Total revenues increased 0.3% to about $9.6 billion and beat the Zacks Consensus Estimate by 0.3%
Combined ratio deteriorated 420 bps year over year to 100.9.
Core return on equity was 6.1%, down 200 bps.
Debt-to-capital improved 10 bps o 17.9% at year end.
Book value as of Dec 31, 2020 was $46.82 per share, up 6% from Dec 31, 2019.
Dividend Update
CNA Financial’s board of directors approved a quarterly dividend of 38 cents, reflecting a 3% increase from the earlier payout. It also paid a special dividend of 75 cents per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.