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Why Hartford Financial (HIG) is Set to Beat on Q2 Earnings
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The Hartford Financial Services Group, Inc. (HIG - Free Report) is set to continue its beat streak in second-quarter 2022 earnings, which are expected to be released on Jul 28, after the closing bell.
In the last reported quarter, the major multi-line insurance and investment company’s adjusted earnings per share of $1.66 beat the Zacks Consensus Estimate by 6.4%, primarily due to growth in property and casualty (P&C) earned premium, favorable P&C prior accident year development (PYD), lower P&C current accident year (CAY) catastrophe (CAT) losses and fall in P&C CAY COVID-19 incurred losses.
Sound contributions by its Commercial Lines and Group Benefits segments also provided a boost to the results. However, the upside was partly offset by elevated group disability loss ratio and Personal Lines underlying loss ratio coupled with higher insurance operating costs and other expenses.
The Zacks Consensus Estimate for second-quarter earnings per share of $1.52 has witnessed no upward revisions but four downward movements in the past 30 days. The estimate is indicative of a 34.8% decrease from the year-ago reported figure. However, the Zacks Consensus Estimate for second-quarter revenues is pegged at $3.7 billion, suggesting an increase of 4% from the year-ago reported figure.
Hartford Financial beat earnings estimates in each of the trailing four quarters, delivering an average of 42.5%. This is depicted in the graph below.
The Hartford Financial Services Group, Inc. Price and EPS Surprise
Our proven model predicts an earnings beat for Hartford Financial this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Earnings ESP: Earnings ESP for the company is currently +0.40%. The Most Accurate Estimate is pegged at $1.53 per share, higher than the Zacks Consensus Estimate of $1.52. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Hartford Financial currently holds a Zacks Rank #3.
Factors Driving Better-Than-Expected Earnings
Hartford Financial’s revenues are likely to have gained from higher contributions by its Commercial Lines, Hartford Funds and Corporate segments. HIG is likely to have continued witnessing strong sales in the to-be-reported quarter.
HIG is likely to have benefited from better-written premiums in the Commercial Lines segment. Hartford Funds and Group Benefits also likely contributed to this upside. The Zacks Consensus Estimate for earned premiums in the second quarter indicates 5.2% year-over-year growth.
The consensus mark for fee income for the second quarter indicates a 7.5% rise from the year-ago level. The factors stated above might have positioned the company for an earnings beat in the second quarter. However, the Zacks Consensus Estimate for net investment income signals a 12% year-over-year decline. Also, the Personal Lines segment is likely to have recorded higher costs. The consensus mark for the Personal Lines-combined ratio is pegged at 99%, much higher than 87% a year ago. Moreover, the Zacks Consensus Estimate for loss ratio in group benefits is pegged at 79% up from 71% a year ago.
Hartford Financial is likely to have continued witnessing pressure on the portfolio yield in the second quarter. The Personal Lines segment might have suffered a soft underlying underwriting gain and a less favorable PYD in the quarter under review. Margins are likely to have been depressed by steep expenses despite its cost-curbing measures. This might have affected its profit levels in the second quarter.
Other Stocks That Warrant a Look
Here are some other companies from the broader Finance space that you may also want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this time around:
The Zacks Consensus Estimate for Assurant’s bottom line for the to-be-reported quarter is pegged at $3.21 per share, indicating a 7.4% year-over-year increase. AIZ beat earnings estimates in each of the trailing four quarters, delivering an average of 18.3%.
LPL Financial Holdings Inc. (LPLA - Free Report) has an Earnings ESP of +0.13% and is a Zacks` #1 Ranked player.
The Zacks Consensus Estimate for LPL Financial’s bottom line for the to-be-reported quarter is pegged at $2.01 per share, implying an 8.7% improvement from the year-ago figure. LPLA beat earnings estimates in each of the trailing four quarters, delivering an average of 7.7%.
Armada Hoffler Properties, Inc. (AHH - Free Report) has an Earnings ESP of +4.17% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Armada Hoffler’s bottom line for the to-be-reported quarter is pegged at 29 cents per share. AHH beat earnings estimates thrice in the trailing four quarters and met once, delivering an average surprise of 6%.
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Why Hartford Financial (HIG) is Set to Beat on Q2 Earnings
The Hartford Financial Services Group, Inc. (HIG - Free Report) is set to continue its beat streak in second-quarter 2022 earnings, which are expected to be released on Jul 28, after the closing bell.
In the last reported quarter, the major multi-line insurance and investment company’s adjusted earnings per share of $1.66 beat the Zacks Consensus Estimate by 6.4%, primarily due to growth in property and casualty (P&C) earned premium, favorable P&C prior accident year development (PYD), lower P&C current accident year (CAY) catastrophe (CAT) losses and fall in P&C CAY COVID-19 incurred losses.
Sound contributions by its Commercial Lines and Group Benefits segments also provided a boost to the results. However, the upside was partly offset by elevated group disability loss ratio and Personal Lines underlying loss ratio coupled with higher insurance operating costs and other expenses.
Let’s see how things have shaped up prior to the second-quarter earnings announcement.
Trend in Estimate Revision
The Zacks Consensus Estimate for second-quarter earnings per share of $1.52 has witnessed no upward revisions but four downward movements in the past 30 days. The estimate is indicative of a 34.8% decrease from the year-ago reported figure. However, the Zacks Consensus Estimate for second-quarter revenues is pegged at $3.7 billion, suggesting an increase of 4% from the year-ago reported figure.
Hartford Financial beat earnings estimates in each of the trailing four quarters, delivering an average of 42.5%. This is depicted in the graph below.
The Hartford Financial Services Group, Inc. Price and EPS Surprise
The Hartford Financial Services Group, Inc. price-eps-surprise | The Hartford Financial Services Group, Inc. Quote
What the Quantitative Model Suggests
Our proven model predicts an earnings beat for Hartford Financial this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Earnings ESP: Earnings ESP for the company is currently +0.40%. The Most Accurate Estimate is pegged at $1.53 per share, higher than the Zacks Consensus Estimate of $1.52. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Hartford Financial currently holds a Zacks Rank #3.
Factors Driving Better-Than-Expected Earnings
Hartford Financial’s revenues are likely to have gained from higher contributions by its Commercial Lines, Hartford Funds and Corporate segments. HIG is likely to have continued witnessing strong sales in the to-be-reported quarter.
HIG is likely to have benefited from better-written premiums in the Commercial Lines segment. Hartford Funds and Group Benefits also likely contributed to this upside. The Zacks Consensus Estimate for earned premiums in the second quarter indicates 5.2% year-over-year growth.
The consensus mark for fee income for the second quarter indicates a 7.5% rise from the year-ago level. The factors stated above might have positioned the company for an earnings beat in the second quarter. However, the Zacks Consensus Estimate for net investment income signals a 12% year-over-year decline. Also, the Personal Lines segment is likely to have recorded higher costs. The consensus mark for the Personal Lines-combined ratio is pegged at 99%, much higher than 87% a year ago. Moreover, the Zacks Consensus Estimate for loss ratio in group benefits is pegged at 79% up from 71% a year ago.
Hartford Financial is likely to have continued witnessing pressure on the portfolio yield in the second quarter. The Personal Lines segment might have suffered a soft underlying underwriting gain and a less favorable PYD in the quarter under review. Margins are likely to have been depressed by steep expenses despite its cost-curbing measures. This might have affected its profit levels in the second quarter.
Other Stocks That Warrant a Look
Here are some other companies from the broader Finance space that you may also want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this time around:
Assurant, Inc. (AIZ - Free Report) has an Earnings ESP of +2.34% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Assurant’s bottom line for the to-be-reported quarter is pegged at $3.21 per share, indicating a 7.4% year-over-year increase. AIZ beat earnings estimates in each of the trailing four quarters, delivering an average of 18.3%.
LPL Financial Holdings Inc. (LPLA - Free Report) has an Earnings ESP of +0.13% and is a Zacks` #1 Ranked player.
The Zacks Consensus Estimate for LPL Financial’s bottom line for the to-be-reported quarter is pegged at $2.01 per share, implying an 8.7% improvement from the year-ago figure. LPLA beat earnings estimates in each of the trailing four quarters, delivering an average of 7.7%.
Armada Hoffler Properties, Inc. (AHH - Free Report) has an Earnings ESP of +4.17% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Armada Hoffler’s bottom line for the to-be-reported quarter is pegged at 29 cents per share. AHH beat earnings estimates thrice in the trailing four quarters and met once, delivering an average surprise of 6%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.