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Progressive's (PGR) Q3 Earnings Beat on Higher Premiums
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Progressive Corp.’s (PGR - Free Report) third-quarter 2016 operating earnings per share of 36 cents surpassed the Zacks Consensus Estimate by 9.1%. Earnings plunged 26% year over year.
Including net realized losses, net income per share was 34 cents, down 28% year over year.
Progressive recorded net premiums written of $6.04 billion in the quarter under review, up 12% from $5.41 billion in the year-ago quarter. Net premiums earned were about $5.73 billion, up 13% year over year from $5.07 billion.
Net realized losses on securities in the quarter were $20.7 million, wider than a loss of $15.8 million incurred in the year-ago quarter. Combined ratio − the percentage of premiums paid out as claims and expenses − deteriorated 380 basis points (bps) from the prior-year quarter to 96.6%.
Numbers in September
Total operating revenue came in at $1.7 billion. Revenues improved 13% year over year due to a 13% increase in premiums and 22% higher service revenues. However, investment income and fees each declined by 2%.
Total expense increased 14.5% to $1.7 billion. The increase in expenses can be primarily attributed to 16.6% higher losses and loss adjustment expenses, 12.8% increase in policy acquisition costs and 4% higher other underwriting expenses.
In Sep 2016, policies in force were healthy with the Personal Auto segment improving 8% from Jun 2015 to 10.3 million. Special Lines inched up 3% from the prior-year month to 4.3 million.
In Progressive's Personal Auto segment, Direct Auto grew 10% year over year to 5.3 million. Agency Auto increased 5% from the comparable year-ago month to nearly 5 million.
Progressive’s Commercial Auto segment grew 12% year over year to 0.6 million. The Property business had about 1.2 million policies in force in the reported month, up 11% year over year.
Progressive’s book value per share was $13.94 as of Sep 30, 2016, up 9.2% from $12.76 as of Sep 30, 2015.
Return on equity on a trailing 12-month basis was 16.4%, down 110 bps from 15.3% in Sep 2015. Debt-to-total capital ratio too deteriorated 130 bps year over year to 28% as of Sep 30, 2016.
Everest Re Group, a writer of property and casualty (P&C), reinsurance and insurance in the U.S, Bermuda and international markets has an Earnings ESP of +9.43%. The company is scheduled to report third-quarter earnings on Oct 24. The Zacks Consensus Estimate for the quarter is currently pegged at $3.71 per share.
NMIH Holdings, a provider of private mortgage guaranty insurance services in the United States, has an Earnings ESP of 0.00%. The company is expected to report third-quarter earnings on Oct 25. The Zacks Consensus Estimate for the quarter is currently pegged at 7 cents.
Selective Insurance, a provider of insurance products and services in the United States has an Earnings ESP of 0.00%. The company is scheduled to report third-quarter earnings on Oct 26. The Zacks Consensus Estimate for the quarter is currently pegged at 67 cents.
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Progressive's (PGR) Q3 Earnings Beat on Higher Premiums
Progressive Corp.’s (PGR - Free Report) third-quarter 2016 operating earnings per share of 36 cents surpassed the Zacks Consensus Estimate by 9.1%. Earnings plunged 26% year over year.
Including net realized losses, net income per share was 34 cents, down 28% year over year.
Progressive recorded net premiums written of $6.04 billion in the quarter under review, up 12% from $5.41 billion in the year-ago quarter. Net premiums earned were about $5.73 billion, up 13% year over year from $5.07 billion.
Net realized losses on securities in the quarter were $20.7 million, wider than a loss of $15.8 million incurred in the year-ago quarter. Combined ratio − the percentage of premiums paid out as claims and expenses − deteriorated 380 basis points (bps) from the prior-year quarter to 96.6%.
Numbers in September
Total operating revenue came in at $1.7 billion. Revenues improved 13% year over year due to a 13% increase in premiums and 22% higher service revenues. However, investment income and fees each declined by 2%.
Total expense increased 14.5% to $1.7 billion. The increase in expenses can be primarily attributed to 16.6% higher losses and loss adjustment expenses, 12.8% increase in policy acquisition costs and 4% higher other underwriting expenses.
In Sep 2016, policies in force were healthy with the Personal Auto segment improving 8% from Jun 2015 to 10.3 million. Special Lines inched up 3% from the prior-year month to 4.3 million.
In Progressive's Personal Auto segment, Direct Auto grew 10% year over year to 5.3 million. Agency Auto increased 5% from the comparable year-ago month to nearly 5 million.
Progressive’s Commercial Auto segment grew 12% year over year to 0.6 million. The Property business had about 1.2 million policies in force in the reported month, up 11% year over year.
Progressive’s book value per share was $13.94 as of Sep 30, 2016, up 9.2% from $12.76 as of Sep 30, 2015.
Return on equity on a trailing 12-month basis was 16.4%, down 110 bps from 15.3% in Sep 2015. Debt-to-total capital ratio too deteriorated 130 bps year over year to 28% as of Sep 30, 2016.
PROGRESSIVE COR Price, Consensus and EPS Surprise
PROGRESSIVE COR Price, Consensus and EPS Surprise | PROGRESSIVE COR Quote
Zacks Rank and Other Stocks to Consider
Progressive carries a Zacks Rank #4 (Sell). Some better-ranked property and casualty insurers are Everest Re Group Ltd , NMIH Holdings, Inc. (NMIH - Free Report) and Selective Insurance Group Inc. (SIGI - Free Report) . Each of these carries Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Everest Re Group, a writer of property and casualty (P&C), reinsurance and insurance in the U.S, Bermuda and international markets has an Earnings ESP of +9.43%. The company is scheduled to report third-quarter earnings on Oct 24. The Zacks Consensus Estimate for the quarter is currently pegged at $3.71 per share.
NMIH Holdings, a provider of private mortgage guaranty insurance services in the United States, has an Earnings ESP of 0.00%. The company is expected to report third-quarter earnings on Oct 25. The Zacks Consensus Estimate for the quarter is currently pegged at 7 cents.
Selective Insurance, a provider of insurance products and services in the United States has an Earnings ESP of 0.00%. The company is scheduled to report third-quarter earnings on Oct 26. The Zacks Consensus Estimate for the quarter is currently pegged at 67 cents.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>