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What's in Store for Hartford Financial's (HIG) Q2 Earnings?

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The Hartford Financial Services Group, Inc. (HIG - Free Report) will release second-quarter 2021 financial results on Jul 29, after the closing bell.
For the to-be-reported quarter, we expect results to reflect a rise in revenues.

Now let’s see how the company is placed before its upcoming earnings announcement.

Q2 Earnings & Revenue Expectations

The Zacks Consensus Estimate for Hartford Financial’s second-quarter earnings of $1.32 per share implies an 8.2% increase from the prior-year quarter’s reported number. Likewise, the consensus estimate for sales of $3.4 billion suggests a 6.1% increase from the year-ago period’s reported figure.

Factors at Play for Q2 Results

Hartford Financial’s revenues are likely to have gained from contribution by its Commercial Lines, Hartford Funds and Corporate segments. Strong sales are expected to have contributed to the top line. Net investment income of the company might have increased owing to solid limited partnership returns.

However, the Personal Lines segment is likely to have recorded shown   lower earned premiums, which in turn, might have dented its revenue base. The segment might have suffered lower miles driven, decreases in moving violations and weak new vehicle sales.

The company is also expected to have witnessed a significant decline in new business in the middle and the large commercial market, which might have dented its overall performance.

The company’s restructuring services are likely to have helped it reduce expenses. In the second quarter of 2020, the insurance provider committed itself to $500 million of expense saving by 2022.

Given its success till the last reported quarter, the company increased the limit to $540 million, which is expected to be achieved by 2022. Given its initiatives, we expect Hartford Financial’s expenses to reduce in the second quarter.

What the Quantitative Model States

Our proven model does not conclusively predict an earnings beat for Hartford Financial this season. The combination of a positive  Earnings ESP  and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our  Earnings ESP Filter.

Earnings ESP: Hartford Financial has an Earnings ESP of -3.99%. This is because the Most Accurate Estimate is pegged at $1.28, lower than the Zacks Consensus Estimate of $1.33.  You can see  the complete list of today’s Zacks #1 Rank stocks here.

Zacks Rank: Hartford Financial currently carries a Zacks Rank #3.

 

Highlights of Q1 Earnings and Surprise History

Hartford Financial reported first-quarter 2021 adjusted operating earnings of 56 cents per share, which missed the Zacks Consensus Estimate by 25.3%. Moreover, the bottom line fell 58.2% year over year due to unfavorable Property and Casualty (P&C) prior accident year development (PYD) within core earnings, excess mortality in group life, higher P&C current accident year (CAY) CAT losses and P&C COVID-19 incurred losses.

The company flaunts an appreciative earnings history, having delivered a surprise in three of the trailing four quarters (missing the mark in one), the average beat being 18.73%.

Stocks to Consider

Some stocks worth considering from the insurance industry with the perfect mix of elements to surpass estimates in the upcoming releases are as follows:

Assurant, Inc. (AIZ - Free Report) currently has a Zacks Rank of 3 and an Earnings ESP of +0.50%.

Radian Group Inc. (RDN - Free Report) is currently Zacks #3 Ranked and has an Earnings ESP of +1.66%.

American International Group, Inc. (AIG - Free Report) has an Earnings ESP of +7.56% and is presently a #3 Ranked player.