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Allstate (ALL) Q3 Earnings Beat, Down Y/Y on High Cat Loss
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Allstate Corporation (ALL - Free Report) reported third-quarter 2016 operating earnings per share of $1.26, beating the Zacks Consensus Estimate of $1.24.
Reported earnings were, however, down 17.1% on a year-over-year basis, due to high catastrophe losses incurred in the quarter.
Allstate’s total revenue increased 2.1% year over year to $9.22 billion. This was primarily due to 29% growth in property-liability insurance premium and 6.1% increase in Allstate Financial premiums and contract charges, partly offset by a 7.3% decline in net investment income. The top line also exceeded the Zacks Consensus Estimate of $8.2 billion.
Property-liability (P&C) combined ratio deteriorated 190 basis points year over year to 95.5%.
Operating expenses increased 2.9% year over year to $1.02 billion.
Net investment income of $748 million declined 7.3% year over year primarily due to lower interest income on market-based investments following the Allstate Financial annuity portfolio repositioning.
During the quarter, the company incurred catastrophe losses of $481 million compared with $270 million in the year-ago quarter.
Quarter in Detail
Property-Liability’s premiums written were $8.3 billion, up 2.1% from the prior-year quarter. Underwriting income of $355 million was down 38% year over year due to an increase in catastrophe losses and unfavorable prior-year reserve reestimates in the company’s Discontinued Lines and Coverages segment, partially offset by a higher earned premium.
On the other hand, operating income for Allstate Financial decreased 32% to $94 million, primarily due to lower limited partnership income and interest income from portfolio repositioning in its annuity business.
Capital Position
Total equity increased to $20.9 billion from $20 billion at 2015 end, while total assets increased to $108.5 billion from $104.7 billion from the same time period. Long-term debt was down a meager 0.3% to $5.1 billion from the 2015-end level.
Book value of $51.48 per share increased 8.3% year over year. Operating return on equity declined 270 basis points year over year to 9.4%.
Stock Repurchase and Dividend Update
Overall, Allstate returned $389 million worth of capital through share buybacks and dividend in the reported quarter.
The bottom line at Lincoln National Corp. (LNC - Free Report) , CNO Financial Group (CNO - Free Report) , and MetLife, Inc. (MET - Free Report) all surpassed the Zacks Consensus Estimate in the third quarter.
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Allstate (ALL) Q3 Earnings Beat, Down Y/Y on High Cat Loss
Allstate Corporation (ALL - Free Report) reported third-quarter 2016 operating earnings per share of $1.26, beating the Zacks Consensus Estimate of $1.24.
Reported earnings were, however, down 17.1% on a year-over-year basis, due to high catastrophe losses incurred in the quarter.
Allstate’s total revenue increased 2.1% year over year to $9.22 billion. This was primarily due to 29% growth in property-liability insurance premium and 6.1% increase in Allstate Financial premiums and contract charges, partly offset by a 7.3% decline in net investment income. The top line also exceeded the Zacks Consensus Estimate of $8.2 billion.
Property-liability (P&C) combined ratio deteriorated 190 basis points year over year to 95.5%.
Operating expenses increased 2.9% year over year to $1.02 billion.
Net investment income of $748 million declined 7.3% year over year primarily due to lower interest income on market-based investments following the Allstate Financial annuity portfolio repositioning.
ALLSTATE CORP Price, Consensus and EPS Surprise
ALLSTATE CORP Price, Consensus and EPS Surprise | ALLSTATE CORP Quote
During the quarter, the company incurred catastrophe losses of $481 million compared with $270 million in the year-ago quarter.
Quarter in Detail
Property-Liability’s premiums written were $8.3 billion, up 2.1% from the prior-year quarter. Underwriting income of $355 million was down 38% year over year due to an increase in catastrophe losses and unfavorable prior-year reserve reestimates in the company’s Discontinued Lines and Coverages segment, partially offset by a higher earned premium.
On the other hand, operating income for Allstate Financial decreased 32% to $94 million, primarily due to lower limited partnership income and interest income from portfolio repositioning in its annuity business.
Capital Position
Total equity increased to $20.9 billion from $20 billion at 2015 end, while total assets increased to $108.5 billion from $104.7 billion from the same time period. Long-term debt was down a meager 0.3% to $5.1 billion from the 2015-end level.
Book value of $51.48 per share increased 8.3% year over year. Operating return on equity declined 270 basis points year over year to 9.4%.
Stock Repurchase and Dividend Update
Overall, Allstate returned $389 million worth of capital through share buybacks and dividend in the reported quarter.
Zacks Rank & Performance of Other Players
Allstate carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The bottom line at Lincoln National Corp. (LNC - Free Report) , CNO Financial Group (CNO - Free Report) , and MetLife, Inc. (MET - Free Report) all surpassed the Zacks Consensus Estimate in the third quarter.
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>>