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Progressive (PGR) April Earnings Decline, Revenues Rise Y/Y
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The Progressive Corporation (PGR - Free Report) reported earnings per share of 54 cents for April 2021, down 67% year over year. The decline was due to higher expenses and lower net realized gain on securities.
In the past year, Progressive’s shares have gained 34.6% compared with the industry’s increase of 49.6%.
Numbers in April
Progressive recorded net premiums written of $4.4 billion in the month, up 18% from $3.8 billion in the year-ago quarter. Net premiums earned were about $4.1 billion, up 14% from $3.6 billion last April.
Net realized gain on securities in the quarter was $191.3 million, down 64% from the prior-year quarter.
Combined ratio — percentage of premiums paid out as claims and expenses — deteriorated 1260 basis points (bps) year over year to 96%.
Total operating revenues came in at $4.3 billion, improving 13.6% year over year owing to 13.7% increase in premiums, 60.5% rise in fees and other revenues plus a 24.6% rise in service revenues. However, the uptick was partly offset by 21.6% lower investment income.
Total expenses rose 31.2% to nearly $4 billion, primarily because of 80.5% rise in losses and loss adjustment expenses, 17.4% rise in policy acquisition costs and 2.6% growth in other underwriting expenses and 37.7% jump in service expenses.
In April, policies in force were impressive in both Vehicle and Property business. In its vehicle business, Personal Auto segment improved 12% year over year to nearly 17.4 million. Special Lines increased 11% from the year-earlier month to 5.1 million policies.
In Progressive’s Personal Auto segment, Agency Auto expanded 10% to 7.9 million while Direct Auto increased 15% to nearly 9.5 million.
Progressive’s Commercial Auto segment rose 15% year over year to 0.9 million. The Property business had 2.6 million policies in force in the reported month, up 14% year over year.
Progressive’s book value per share was $30.34 as of Apr 30, 2021, up 17.9% from $25.74 as of Apr 30, 2020.
Return on equity in the trailing 12 months was 33.1%, down 30 bps from 33.4% in April 2020. The debt-to-total-capital ratio improved 290 bps year over year to 22.8 as of Apr 30, 2021.
Zacks Rank and Stocks to Consider
Progressive currently carries a Zacks Rank #3 (Hold). Some better-ranked insurance stocks from the same space are HCI Group, Inc. (HCI - Free Report) , American Financial Group, Inc. (AFG - Free Report) and Alleghany Corporation . While HCI Group sports a Zacks Rank #1 (Strong Buy), American Financial and Alleghany carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of HCI Group surpassed estimates in three of the last four quarters and missed in the other one, the average being 42.91%.
American Financial surpassed estimates in three of the last four quarters and missed in the other one, the average earnings surprise being 32.2%.
Alleghany’s earnings surpassed estimates in each of the last four quarters, the average being 128.63%.
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Progressive (PGR) April Earnings Decline, Revenues Rise Y/Y
The Progressive Corporation (PGR - Free Report) reported earnings per share of 54 cents for April 2021, down 67% year over year. The decline was due to higher expenses and lower net realized gain on securities.
In the past year, Progressive’s shares have gained 34.6% compared with the industry’s increase of 49.6%.
Numbers in April
Progressive recorded net premiums written of $4.4 billion in the month, up 18% from $3.8 billion in the year-ago quarter. Net premiums earned were about $4.1 billion, up 14% from $3.6 billion last April.
Net realized gain on securities in the quarter was $191.3 million, down 64% from the prior-year quarter.
Combined ratio — percentage of premiums paid out as claims and expenses — deteriorated 1260 basis points (bps) year over year to 96%.
Total operating revenues came in at $4.3 billion, improving 13.6% year over year owing to 13.7% increase in premiums, 60.5% rise in fees and other revenues plus a 24.6% rise in service revenues. However, the uptick was partly offset by 21.6% lower investment income.
Total expenses rose 31.2% to nearly $4 billion, primarily because of 80.5% rise in losses and loss adjustment expenses, 17.4% rise in policy acquisition costs and 2.6% growth in other underwriting expenses and 37.7% jump in service expenses.
In April, policies in force were impressive in both Vehicle and Property business. In its vehicle business, Personal Auto segment improved 12% year over year to nearly 17.4 million. Special Lines increased 11% from the year-earlier month to 5.1 million policies.
In Progressive’s Personal Auto segment, Agency Auto expanded 10% to 7.9 million while Direct Auto increased 15% to nearly 9.5 million.
Progressive’s Commercial Auto segment rose 15% year over year to 0.9 million. The Property business had 2.6 million policies in force in the reported month, up 14% year over year.
Progressive’s book value per share was $30.34 as of Apr 30, 2021, up 17.9% from $25.74 as of Apr 30, 2020.
Return on equity in the trailing 12 months was 33.1%, down 30 bps from 33.4% in April 2020. The debt-to-total-capital ratio improved 290 bps year over year to 22.8 as of Apr 30, 2021.
Zacks Rank and Stocks to Consider
Progressive currently carries a Zacks Rank #3 (Hold). Some better-ranked insurance stocks from the same space are HCI Group, Inc. (HCI - Free Report) , American Financial Group, Inc. (AFG - Free Report) and Alleghany Corporation . While HCI Group sports a Zacks Rank #1 (Strong Buy), American Financial and Alleghany carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of HCI Group surpassed estimates in three of the last four quarters and missed in the other one, the average being 42.91%.
American Financial surpassed estimates in three of the last four quarters and missed in the other one, the average earnings surprise being 32.2%.
Alleghany’s earnings surpassed estimates in each of the last four quarters, the average being 128.63%.
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.
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