We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Spotlight on Employers Holdings' (EIG) Q4 Earnings Drivers
Read MoreHide Full Article
Employers Holdings, Inc. (EIG - Free Report) is set to report its fourth-quarter 2023 results on Feb 15, after the closing bell. It is expected to have witnessed increased net premiums earned and lower net investment income in the December quarter.
Earnings Surprise History
Employers Holdings’ earnings beat the consensus estimate in all the prior four quarters, with the average being 26.5%. This is depicted in the graph below:
In the last reported quarter, the workers' compensation insurance provider reported adjusted operating earnings per share of 68 cents, beating the Zacks Consensus Estimate by 6.3% due to new business growth and strong renewal rates, as well as a solid contribution from the Employers segment.
The positives were partially offset by an elevated expense level, which resulted from increased compensation-related expenses, policyholder dividends and bad debt expenses.
The Zacks Consensus Estimate for fourth-quarter combined ratio — a measure of underwriting profitability — is pegged at 95.5%, significantly higher than 86.6% witnessed a year ago. This means a smaller portion of Employers segment premiums were retained by the company following the claims payouts in the fourth quarter.
The company is expected to have encountered higher expenses due to increased losses and LAE incurred and commission expenses. Also, the consensus mark for net investment income predicts a 5.4% decrease from the year-ago period. Lower bond yields are likely to have affected the figure.
The factors stated above are likely to have led to a year-over-year decline in EIG’s fourth-quarter results, making an earnings beat uncertain. The Zacks Consensus Estimate for fourth-quarter earnings per share of $1 suggests a 20% decline from the prior-year level of $1.25. The estimate remained stable over the past week.
Moreover, the consensus estimate for fourth-quarter revenues of $213.3 million indicates a 3.9% decrease from the year-ago reported figure. Nevertheless, the negatives are likely to have been partially offset by higher net premiums earned.
The Zacks Consensus Estimate for fourth-quarter net premiums earned indicates 4.8% year-over-year growth. This is expected to have been supported by Cerity and Employers segments’ net premiums earned growth. Continuous new business growth and strong renewal rates are expected to have aided EIG’s fourth-quarter performance.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Employers Holdings 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. That is not the case here, as you will see below.
Earnings ESP: The company currently has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate currently stands at an earnings of $1 per share, in line with the Zacks Consensus Estimate.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Employers Holdings currently carries a Zacks Rank #3.
Here are some companies from the broader Finance space that have already reported earnings for the December quarter: Aflac Incorporated (AFL - Free Report) , Unum Group (UNM - Free Report) and Lincoln National Corporation (LNC - Free Report) .
Aflac reported fourth-quarter 2023 adjusted earnings of $1.25 per share, missing the Zacks Consensus Estimate by 15%. Higher benefits and claims, lower adjusted net investment income and declining profit levels from the U.S. businesses affected AFL’s earnings. However, improving profit levels in the Japan segment partially offset the negatives.
Unum Group’s fourth-quarter 2023 operating net income of $1.79 per share missed the Zacks Consensus Estimate by 3.8% due to higher policy benefits, commissions, interest and debt expenses and weaker performance in Unum International and Colonial Life. The negatives were partly offset by strong operations in the Unum U.S. unit.
Lincoln National reported fourth-quarter 2023 adjusted earnings of $1.45 per share, which outpaced the Zacks Consensus Estimate by 9.9% on the back of solid contributions from the Group Protection business, a strong fixed annuity business and positive flows in the Retirement Plan Services unit. However, the upside was partly offset by changes in market risk benefits.
Image: Bigstock
Spotlight on Employers Holdings' (EIG) Q4 Earnings Drivers
Employers Holdings, Inc. (EIG - Free Report) is set to report its fourth-quarter 2023 results on Feb 15, after the closing bell. It is expected to have witnessed increased net premiums earned and lower net investment income in the December quarter.
Earnings Surprise History
Employers Holdings’ earnings beat the consensus estimate in all the prior four quarters, with the average being 26.5%. This is depicted in the graph below:
Employers Holdings Inc Price and EPS Surprise
Employers Holdings Inc price-eps-surprise | Employers Holdings Inc Quote
In the last reported quarter, the workers' compensation insurance provider reported adjusted operating earnings per share of 68 cents, beating the Zacks Consensus Estimate by 6.3% due to new business growth and strong renewal rates, as well as a solid contribution from the Employers segment.
The positives were partially offset by an elevated expense level, which resulted from increased compensation-related expenses, policyholder dividends and bad debt expenses.
Now, let’s see how things have shaped up prior to the fourth-quarter earnings announcement.
Q4 Factors to Note
The Zacks Consensus Estimate for fourth-quarter combined ratio — a measure of underwriting profitability — is pegged at 95.5%, significantly higher than 86.6% witnessed a year ago. This means a smaller portion of Employers segment premiums were retained by the company following the claims payouts in the fourth quarter.
The company is expected to have encountered higher expenses due to increased losses and LAE incurred and commission expenses. Also, the consensus mark for net investment income predicts a 5.4% decrease from the year-ago period. Lower bond yields are likely to have affected the figure.
The factors stated above are likely to have led to a year-over-year decline in EIG’s fourth-quarter results, making an earnings beat uncertain. The Zacks Consensus Estimate for fourth-quarter earnings per share of $1 suggests a 20% decline from the prior-year level of $1.25. The estimate remained stable over the past week.
Moreover, the consensus estimate for fourth-quarter revenues of $213.3 million indicates a 3.9% decrease from the year-ago reported figure. Nevertheless, the negatives are likely to have been partially offset by higher net premiums earned.
The Zacks Consensus Estimate for fourth-quarter net premiums earned indicates 4.8% year-over-year growth. This is expected to have been supported by Cerity and Employers segments’ net premiums earned growth. Continuous new business growth and strong renewal rates are expected to have aided EIG’s fourth-quarter performance.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Employers Holdings 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. That is not the case here, as you will see below.
Earnings ESP: The company currently has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate currently stands at an earnings of $1 per share, in line with the Zacks Consensus Estimate.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Employers Holdings currently carries a Zacks Rank #3.
You can see the complete list of today’s Zacks #1 Rank stocks here.
How Other Stocks Performed
Here are some companies from the broader Finance space that have already reported earnings for the December quarter: Aflac Incorporated (AFL - Free Report) , Unum Group (UNM - Free Report) and Lincoln National Corporation (LNC - Free Report) .
Aflac reported fourth-quarter 2023 adjusted earnings of $1.25 per share, missing the Zacks Consensus Estimate by 15%. Higher benefits and claims, lower adjusted net investment income and declining profit levels from the U.S. businesses affected AFL’s earnings. However, improving profit levels in the Japan segment partially offset the negatives.
Unum Group’s fourth-quarter 2023 operating net income of $1.79 per share missed the Zacks Consensus Estimate by 3.8% due to higher policy benefits, commissions, interest and debt expenses and weaker performance in Unum International and Colonial Life. The negatives were partly offset by strong operations in the Unum U.S. unit.
Lincoln National reported fourth-quarter 2023 adjusted earnings of $1.45 per share, which outpaced the Zacks Consensus Estimate by 9.9% on the back of solid contributions from the Group Protection business, a strong fixed annuity business and positive flows in the Retirement Plan Services unit. However, the upside was partly offset by changes in market risk benefits.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.