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Everest Re (RE) Q2 Earnings and Revenues Beat Estimates
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Everest Re Group Ltd. reported second-quarter 2016 operating earnings of $3.17 per share that surpassed the Zacks Consensus Estimate by 16.5%. The outperformance stemmed from increase in premium and investment income. The bottom line, however, plunged 37% year over year.
The year-over-year decline can primarily be attributed to number of catastrophe loss events and foreign currency fluctuations.
Including net realized capital gain of 51 cents per share, the company’s net income decreased 21.9% year over year to $3.67 per share.
Operational Update
Everest Re’s total operating revenue of $1.39 billion declined marginally by 1.4% year over year on higher other expenses. Revenues outpaced the Zacks Consensus Estimate of $1.38 billion by 0.7%.
Gross written premiums increased 8% year over year to $1.4 billion. Excluding foreign currency fluctuations, premiums were up 10%.
Everest Re’s net investment income came in at $132.7 million in the quarter, up 6.2% year over year. This included a $23 million income on limited partnership investments.
Total claims and expenses rose 7.8% year over year to $1.24 billion Increase in losses incurred and loss adjustment expenses, along with higher commission, brokerage, taxes and fees, and other underwriting expenses resulted in the rise in total cost. Also, corporate expenses as well as interest, fees and bond issue cost amortization expenses increased the overall expenses.
Combined ratio, deteriorated 710 basis points (bps) year over year in the second quarter to 95.1%. The metric deteriorated 20 bps to 86.1% after excluding catastrophe losses, reinstatement premiums, and prior period loss development.
Everest Re exited the quarter with total assets of $21.28 billion, up from $20.55 billion at the end of 2015. Everest Re’s shareholder equity at the end of the reported quarter was $7.98 billion as against the 2015-end level of $7.6 billion.
Total cash balance at the end of the quarter was $429.3 million, up from $283.7 million as of Dec 31, 2015. Everest Re's cash flow from operations was $307.3 million in the second quarter, up 69.7% year on year.
Book value per share increased 7% from year-end 2015 to $190.66 as of Jun 30, 2016.
Return on equity was 9.4% for the reported quarter.
Share Repurchase Update
During the quarter, Everest Re bought back 0.54 million shares for $100.4 million at an average price of $184.37 per share. The company now has 3.1 million shares available for repurchase.
Dividend Update
Dividend declared in the quarter was $1.15 per share, up 21.1% from year-ago quarter.
We wait to see how the stock fares after the better-than-expected quarterly performance.
Zacks Rank and Other Stocks
Everest Re holds a Zacks Rank #3 (Hold). Among the other players in the insurance industry that have reported their earnings so far, the bottom line at The Travelers Companies, Inc. (TRV - Free Report) and First American Financial Corporation (FAF - Free Report) beat their respective Zacks Consensus Estimate, while earnings of RLI Corp. (RLI - Free Report) missed the same.
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Everest Re (RE) Q2 Earnings and Revenues Beat Estimates
Everest Re Group Ltd. reported second-quarter 2016 operating earnings of $3.17 per share that surpassed the Zacks Consensus Estimate by 16.5%. The outperformance stemmed from increase in premium and investment income. The bottom line, however, plunged 37% year over year.
The year-over-year decline can primarily be attributed to number of catastrophe loss events and foreign currency fluctuations.
Including net realized capital gain of 51 cents per share, the company’s net income decreased 21.9% year over year to $3.67 per share.
Operational Update
Everest Re’s total operating revenue of $1.39 billion declined marginally by 1.4% year over year on higher other expenses. Revenues outpaced the Zacks Consensus Estimate of $1.38 billion by 0.7%.
Gross written premiums increased 8% year over year to $1.4 billion. Excluding foreign currency fluctuations, premiums were up 10%.
Everest Re’s net investment income came in at $132.7 million in the quarter, up 6.2% year over year. This included a $23 million income on limited partnership investments.
Total claims and expenses rose 7.8% year over year to $1.24 billion Increase in losses incurred and loss adjustment expenses, along with higher commission, brokerage, taxes and fees, and other underwriting expenses resulted in the rise in total cost. Also, corporate expenses as well as interest, fees and bond issue cost amortization expenses increased the overall expenses.
Combined ratio, deteriorated 710 basis points (bps) year over year in the second quarter to 95.1%. The metric deteriorated 20 bps to 86.1% after excluding catastrophe losses, reinstatement premiums, and prior period loss development.
EVEREST RE LTD Price, Consensus and EPS Surprise
EVEREST RE LTD Price, Consensus and EPS Surprise | EVEREST RE LTD Quote
Financial Update
Everest Re exited the quarter with total assets of $21.28 billion, up from $20.55 billion at the end of 2015. Everest Re’s shareholder equity at the end of the reported quarter was $7.98 billion as against the 2015-end level of $7.6 billion.
Total cash balance at the end of the quarter was $429.3 million, up from $283.7 million as of Dec 31, 2015. Everest Re's cash flow from operations was $307.3 million in the second quarter, up 69.7% year on year.
Book value per share increased 7% from year-end 2015 to $190.66 as of Jun 30, 2016.
Return on equity was 9.4% for the reported quarter.
Share Repurchase Update
During the quarter, Everest Re bought back 0.54 million shares for $100.4 million at an average price of $184.37 per share. The company now has 3.1 million shares available for repurchase.
Dividend Update
Dividend declared in the quarter was $1.15 per share, up 21.1% from year-ago quarter.
We wait to see how the stock fares after the better-than-expected quarterly performance.
Zacks Rank and Other Stocks
Everest Re holds a Zacks Rank #3 (Hold). Among the other players in the insurance industry that have reported their earnings so far, the bottom line at The Travelers Companies, Inc. (TRV - Free Report) and First American Financial Corporation (FAF - Free Report) beat their respective Zacks Consensus Estimate, while earnings of RLI Corp. (RLI - Free Report) missed the same.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>