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CNA Financial (CNA) Down 4.9% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for CNA Financial (CNA - Free Report) . Shares have lost about 4.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is CNA Financial due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
CNA Financial Q4 Earnings & Revenues Beat, Dividend Up
CNA Financial reported fourth-quarter 2023 core earnings of $1.33 per share, which beat the Zacks Consensus Estimate by 27.9%. The bottom line increased 31.7% year over year.
The insurer’s results reflect improved premiums, higher investment income and lower catastrophe losses.
Behind Fourth-Quarter Headlines
Total operating revenues of CNA Financial were $3.1 billion, up 13.1% year over year due to higher premiums and net investment income. The top line beat the Zacks Consensus Estimate by 5.1%.
Net written premiums of Property & Casualty Operations increased 10% year over year to $2.5 billion, driven by a retention rate of 53% and renewal premium change of 5%, with a written rate of 4%, exposure change of 1% and new business increase of 16%.
Net investment income jumped 21.5% to $611 million, driven by favorable limited partnership returns and higher income from fixed-income securities as a result of the rising interest rate environment. Our estimate was pinned at $569.2 million.
Total claims, benefits and expenses declined 8% year over year to $3 billion. Our estimate was $2.9 billion.
Catastrophe losses were $22 million, narrower than a loss of $76 million in the year-ago quarter.
Underwriting income decreased 14% year over year to $80 million. The combined ratio deteriorated 160 basis points (bps) year over year to 92.1. The Zacks Consensus Estimate was pegged at 94.
Segment Results
Commercial’s net written premiums climbed 18% year over year to $1.3 billion. The combined ratio deteriorated 610 bps to 92.9. The Zacks Consensus Estimate was pegged at 96.
Specialty’s net written premiums increased 3% year over year to $891 million. The combined ratio deteriorated 200 bps to 90.8. The consensus estimate was pegged at 91.
International’s net written premiums remained steady at $325 million. The combined ratio deteriorated 410 bps to 93. The Zacks Consensus Estimate was pegged at 94.
Life & Group’s net earned premiums were $111 million, down 5.1% year over year. Our estimate was $113.7 million. The core income was $4 million against a loss of $25 million incurred in the year-ago quarter.
Corporate & Other’s core loss of $76 million was wider than a loss of $52 million in the year-ago quarter.
Full-Year Highlights
Core net income of $4.71 billion increased 30.7% to $4.71 billion.
Net earned premiums improved 9% to $9.5 billion. P&C renewal premium change rose 7%, with a written rate of 5% and exposure change of 2%.
Underwriting income was $585 million, down 4.7%.
P&C combined ratio of 93.5% deteriorated 30 bps.
Financial Update
Total assets increased 6.1% from the 2022 end level to $64.7 billion. Debt level increased 9% to $3 billion. Stockholders' equity of $9.9 billion improved 16% from year-end 2022.
The core return on equity was 10.4%, up 360 bps.
Book value, excluding AOCI as of Dec 31, was $46.39 per share, up 1% from Dec 31, 2022.
Statutory surplus was $10.9 billion at 2023 end, up 3.5% from 2022 end level.
Net cash flow provided by operating activities rose 1.6% to $520 million in the quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
Currently, CNA Financial has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
CNA Financial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
CNA Financial belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, Chubb (CB - Free Report) , has gained 0.7% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Chubb reported revenues of $13.38 billion in the last reported quarter, representing a year-over-year change of +14.7%. EPS of $8.30 for the same period compares with $4.05 a year ago.
Chubb is expected to post earnings of $5.28 per share for the current quarter, representing a year-over-year change of +19.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.3%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Chubb. Also, the stock has a VGM Score of B.
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CNA Financial (CNA) Down 4.9% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for CNA Financial (CNA - Free Report) . Shares have lost about 4.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is CNA Financial due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
CNA Financial Q4 Earnings & Revenues Beat, Dividend Up
CNA Financial reported fourth-quarter 2023 core earnings of $1.33 per share, which beat the Zacks Consensus Estimate by 27.9%. The bottom line increased 31.7% year over year.
The insurer’s results reflect improved premiums, higher investment income and lower catastrophe losses.
Behind Fourth-Quarter Headlines
Total operating revenues of CNA Financial were $3.1 billion, up 13.1% year over year due to higher premiums and net investment income. The top line beat the Zacks Consensus Estimate by 5.1%.
Net written premiums of Property & Casualty Operations increased 10% year over year to $2.5 billion, driven by a retention rate of 53% and renewal premium change of 5%, with a written rate of 4%, exposure change of 1% and new business increase of 16%.
Net investment income jumped 21.5% to $611 million, driven by favorable limited partnership returns and higher income from fixed-income securities as a result of the rising interest rate environment. Our estimate was pinned at $569.2 million.
Total claims, benefits and expenses declined 8% year over year to $3 billion. Our estimate was $2.9 billion.
Catastrophe losses were $22 million, narrower than a loss of $76 million in the year-ago quarter.
Underwriting income decreased 14% year over year to $80 million. The combined ratio deteriorated 160 basis points (bps) year over year to 92.1. The Zacks Consensus Estimate was pegged at 94.
Segment Results
Commercial’s net written premiums climbed 18% year over year to $1.3 billion. The combined ratio deteriorated 610 bps to 92.9. The Zacks Consensus Estimate was pegged at 96.
Specialty’s net written premiums increased 3% year over year to $891 million. The combined ratio deteriorated 200 bps to 90.8. The consensus estimate was pegged at 91.
International’s net written premiums remained steady at $325 million. The combined ratio deteriorated 410 bps to 93. The Zacks Consensus Estimate was pegged at 94.
Life & Group’s net earned premiums were $111 million, down 5.1% year over year. Our estimate was $113.7 million. The core income was $4 million against a loss of $25 million incurred in the year-ago quarter.
Corporate & Other’s core loss of $76 million was wider than a loss of $52 million in the year-ago quarter.
Full-Year Highlights
Core net income of $4.71 billion increased 30.7% to $4.71 billion.
Net earned premiums improved 9% to $9.5 billion. P&C renewal premium change rose 7%, with a written rate of 5% and exposure change of 2%.
Underwriting income was $585 million, down 4.7%.
P&C combined ratio of 93.5% deteriorated 30 bps.
Financial Update
Total assets increased 6.1% from the 2022 end level to $64.7 billion. Debt level increased 9% to $3 billion. Stockholders' equity of $9.9 billion improved 16% from year-end 2022.
The core return on equity was 10.4%, up 360 bps.
Book value, excluding AOCI as of Dec 31, was $46.39 per share, up 1% from Dec 31, 2022.
Statutory surplus was $10.9 billion at 2023 end, up 3.5% from 2022 end level.
Net cash flow provided by operating activities rose 1.6% to $520 million in the quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
Currently, CNA Financial has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
CNA Financial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
CNA Financial belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, Chubb (CB - Free Report) , has gained 0.7% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Chubb reported revenues of $13.38 billion in the last reported quarter, representing a year-over-year change of +14.7%. EPS of $8.30 for the same period compares with $4.05 a year ago.
Chubb is expected to post earnings of $5.28 per share for the current quarter, representing a year-over-year change of +19.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.3%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Chubb. Also, the stock has a VGM Score of B.