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Allstate (ALL) to Report Q2 Earnings: Here's What to Expect
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The Allstate Corporation (ALL - Free Report) is set to report its second-quarter 2023 results on Aug 1, after the closing bell.
What do the Estimates Say
The Zacks Consensus Estimate for second-quarter earnings per share is pegged at a loss of $3.83. Notably, a loss of 76 cents per share was reported in the prior-year quarter. The consensus mark witnessed six downward revisions against none in the opposite direction in the past week.
The consensus estimate for second-quarter revenues of $13.8 billion indicates a 6.7% increase from the year-ago reported figure.
Allstate beat the consensus estimate for earnings in each of the trailing four quarters, with the average surprise being 18.5%. This is depicted in the graph below:
Before we get into what to expect for the to-be-reported quarter in detail, it is worth looking at ALL’s first-quarter performance.
Q1 Earnings Rewind
The Property and Casualty insurer reported an adjusted loss of $1.30 per share for the previous quarter, narrower than the Zacks Consensus Estimate of a loss of $1.94 per share. The quarterly results took a hit from significant catastrophe losses, escalating expenses and lower contributions from the Protection Services and Health and Benefits segments.
Revenues of Allstate are likely to have benefited on the back of improved premiums in the Property-Liability segment in the second quarter. Higher average premiums resulting from frequent rate increases in its auto insurance business coupled with policy growth in the homeowners’ insurance business are likely to have aided the Property-Liability segment. However, escalating loss costs resulting from persistent inflationary pressure are expected to have affected both the auto and homeowners’ insurance businesses in the to-be-reported quarter. We expect premiums earned for the second quarter to be $10,970.7 million, implying a 0.9% year-over-year increase.
ALL’s top line is expected to have received an impetus from the rising net investment income due to growing market-based investment income. This, in turn, is likely to have been aided by increased yields from fixed-income securities.
However, the continued incidence of catastrophe losses is likely to have dampened the underwriting performance of Allstate in the second quarter. We expect catastrophe losses to increase 59.2% year-over-year in the second quarter.
Softer underwriting results are expected to have led to a deteriorating combined ratio. Increasing loss costs are expected to degrade the overall efficiency of ALL’s operations, signaling a deteriorating combined ratio. However, our estimate for the combined ratio stands at 107.1% for the second quarter, suggesting an improvement of 80 basis points year over year.
Improved Allstate Protection Plan revenues might have contributed to the sound performance of the Protection Services segment of Allstate in the second quarter. We expect premiums earned for this segment to be $523 million in the second quarter, implying a 7.2% year-over-year increase. Moreover, the company is aiming to expand its protection services through new products and geographic locations as part of its strategy to improve results.
Meanwhile, the Allstate Health and Benefits segment is likely to have gained on expanding premiums from group health products coupled with an improving benefit ratio in the to-be-reported quarter.
Despite prudent cost-curbing initiatives, margins of Allstate are expected to have suffered due to elevated property and casualty insurance claims and claims expenses in the second quarter.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Allstate this time around. 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. This is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Allstate currently carries a Zacks Rank #5 (Strong Sell).
Stocks to Consider
Here are some companies from the insurance space, which according to our model, have the right combination of elements to beat on earnings this time around:
The Zacks Consensus Estimate for AEL’s second-quarter 2023 earnings is pegged at $1.57 per share, indicating a surge of 60.2% from the prior-year quarter’s reported figure.
American Equity’s bottom line beat estimates in three of the trailing four quarters and missed once, the average surprise being 13%.
Aflac Incorporated (AFL - Free Report) has an Earnings ESP of +1.41% and a Zacks Rank of 3. The Zacks Consensus Estimate for AFL’s second-quarter 2023 earnings is pegged at $1.42 per share. The consensus mark for AFL’s second-quarter earnings has moved 0.7% north in the past 60 days.
Aflac’s earnings beat estimates in each of the trailing four quarters, the average surprise being 8.2%.
Brighthouse Financial, Inc. (BHF - Free Report) has an Earnings ESP of +0.42% and a Zacks Rank of 3. The Zacks Consensus Estimate for BHF’s second-quarter 2023 earnings is pegged at $3.55 per share, suggesting 7.9% growth from the prior-year quarter’s reported figure.
Brighthouse Financial has witnessed three upward estimate revisions for second-quarter earnings compared to two downward estimate revisions in the past 30 days.
Image: Bigstock
Allstate (ALL) to Report Q2 Earnings: Here's What to Expect
The Allstate Corporation (ALL - Free Report) is set to report its second-quarter 2023 results on Aug 1, after the closing bell.
What do the Estimates Say
The Zacks Consensus Estimate for second-quarter earnings per share is pegged at a loss of $3.83. Notably, a loss of 76 cents per share was reported in the prior-year quarter. The consensus mark witnessed six downward revisions against none in the opposite direction in the past week.
The consensus estimate for second-quarter revenues of $13.8 billion indicates a 6.7% increase from the year-ago reported figure.
Allstate beat the consensus estimate for earnings in each of the trailing four quarters, with the average surprise being 18.5%. This is depicted in the graph below:
The Allstate Corporation Price and Consensus
The Allstate Corporation price-consensus-chart | The Allstate Corporation Quote
Before we get into what to expect for the to-be-reported quarter in detail, it is worth looking at ALL’s first-quarter performance.
Q1 Earnings Rewind
The Property and Casualty insurer reported an adjusted loss of $1.30 per share for the previous quarter, narrower than the Zacks Consensus Estimate of a loss of $1.94 per share. The quarterly results took a hit from significant catastrophe losses, escalating expenses and lower contributions from the Protection Services and Health and Benefits segments.
Now let’s see how things have shaped up before the second-quarter earnings announcement.
Factors to Note
Revenues of Allstate are likely to have benefited on the back of improved premiums in the Property-Liability segment in the second quarter. Higher average premiums resulting from frequent rate increases in its auto insurance business coupled with policy growth in the homeowners’ insurance business are likely to have aided the Property-Liability segment. However, escalating loss costs resulting from persistent inflationary pressure are expected to have affected both the auto and homeowners’ insurance businesses in the to-be-reported quarter. We expect premiums earned for the second quarter to be $10,970.7 million, implying a 0.9% year-over-year increase.
ALL’s top line is expected to have received an impetus from the rising net investment income due to growing market-based investment income. This, in turn, is likely to have been aided by increased yields from fixed-income securities.
However, the continued incidence of catastrophe losses is likely to have dampened the underwriting performance of Allstate in the second quarter. We expect catastrophe losses to increase 59.2% year-over-year in the second quarter.
Softer underwriting results are expected to have led to a deteriorating combined ratio. Increasing loss costs are expected to degrade the overall efficiency of ALL’s operations, signaling a deteriorating combined ratio. However, our estimate for the combined ratio stands at 107.1% for the second quarter, suggesting an improvement of 80 basis points year over year.
Improved Allstate Protection Plan revenues might have contributed to the sound performance of the Protection Services segment of Allstate in the second quarter. We expect premiums earned for this segment to be $523 million in the second quarter, implying a 7.2% year-over-year increase. Moreover, the company is aiming to expand its protection services through new products and geographic locations as part of its strategy to improve results.
Meanwhile, the Allstate Health and Benefits segment is likely to have gained on expanding premiums from group health products coupled with an improving benefit ratio in the to-be-reported quarter.
Despite prudent cost-curbing initiatives, margins of Allstate are expected to have suffered due to elevated property and casualty insurance claims and claims expenses in the second quarter.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Allstate this time around. 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. This is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Allstate currently carries a Zacks Rank #5 (Strong Sell).
Stocks to Consider
Here are some companies from the insurance space, which according to our model, have the right combination of elements to beat on earnings this time around:
American Equity Investment Life Holding Company has an Earnings ESP of +7.85% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AEL’s second-quarter 2023 earnings is pegged at $1.57 per share, indicating a surge of 60.2% from the prior-year quarter’s reported figure.
American Equity’s bottom line beat estimates in three of the trailing four quarters and missed once, the average surprise being 13%.
Aflac Incorporated (AFL - Free Report) has an Earnings ESP of +1.41% and a Zacks Rank of 3. The Zacks Consensus Estimate for AFL’s second-quarter 2023 earnings is pegged at $1.42 per share. The consensus mark for AFL’s second-quarter earnings has moved 0.7% north in the past 60 days.
Aflac’s earnings beat estimates in each of the trailing four quarters, the average surprise being 8.2%.
Brighthouse Financial, Inc. (BHF - Free Report) has an Earnings ESP of +0.42% and a Zacks Rank of 3. The Zacks Consensus Estimate for BHF’s second-quarter 2023 earnings is pegged at $3.55 per share, suggesting 7.9% growth from the prior-year quarter’s reported figure.
Brighthouse Financial has witnessed three upward estimate revisions for second-quarter earnings compared to two downward estimate revisions in the past 30 days.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.