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Progressive (PGR) Q1 Earnings Miss, Revenues Beat Estimates

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The Progressive Corporation’s (PGR - Free Report) first-quarter 2022 earnings per share of $1.12 missed the Zacks Consensus Estimate of $1.24. Also, the bottom line declined 34.9% from the year-ago quarter.

Shares of Progressive lost 3.2% in the pre-market trading session, reflecting the underperformance.

The Progressive Corporation Price, Consensus and EPS Surprise

 

Behind the Headlines

Net premiums written were $13.2 billion in the quarter, up 12% from $11.7 billion a year ago. Net premiums earned grew 13% to nearly $11.8 billion.

Net realized loss on securities was $445.3 million against a gain of $585.3 million in the year-ago quarter.

The combined ratio — the percentage of premiums paid out as claims and expenses — deteriorated 520 basis points (bps) from the prior-year quarter to 94.7.

Operating revenues were $12.3 million, up 13.1% year over year. The improvement was driven by a 13% increase in premiums, 5% higher fees and other revenues, 25.8% increase in service revenues and 10% higher investment income. The top line beat the consensus estimate by 0.4%

Total expenses increased 19.6% year over year to $11.5 billion due to 24.6% higher losses and loss adjustment expenses, 1.7% rise in other underwriting expenses and a 10.2% increase in policy acquisition costs.

Impressive March Policies in Force

Policies in force were impressive in the Personal Auto segment, having improved 1% from the year-ago month to 17.3 million. Special Lines improved 6% to 5.3 million.

In Progressive’s Personal Auto segment, Direct Auto grew 2% year over year to 9.5 million while Agency Auto dropped 1% to 9.5 million.

Progressive’s Commercial Auto segment rose 16% year over year to about 1 million. The Property business had about 2.8 million policies in force, up 9%.

Financial Update

Progressive’s book value per share was $28.31 as of Mar 31, 2022, down 4.5% from $29.64 on Mar 31, 2021.

Return on equity in March 2022 was 2.1%, down 3630 bps year over year. Debt-to-total capital ratio deteriorated 400 bps to 27.2.

Zacks Rank

Progressive currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

RLI Corporation (RLI - Free Report) will report first-quarter 2022 results on Apr 20. The Zacks Consensus Estimate for the first quarter is pegged at $1.02, suggesting an improvement of 17.2% year over year.

RLI beat estimates in all quarters of 2021.

W.R. Berkley Corporation (WRB - Free Report) will report first-quarter 2022 results on Apr 25. The Zacks Consensus Estimate for the first quarter is pegged at 92 cents, indicating an increase of 27.8% from the year-ago reported figure.

W.R. Berkley beat estimates in all four quarters of 2021.

Chubb Limited (CB - Free Report) is set to report first-quarter 2022 results on Apr 26. The Zacks Consensus Estimate for the first quarter is pegged at $3.55, indicating an increase of 40.9% from the year-ago reported figure.

Chubb delivered an earnings surprise in all the four quarters of 2021.

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