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Why Is ProAssurance (PRA) Down 4.3% Since the Last Earnings Report?
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A month has gone by since the last earnings report for ProAssurance Corporation (PRA - Free Report) . Shares have lost about 4.3% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
ProAssurance Corporation’s fourth-quarter 2016 operating earnings per share of $0.83 surpassed the Zacks Consensus Estimate by 5%. The bottom line also improved 13.6% year over year.
However, full-year 2016 operating EPS came in at $2.43, down 6.2% year over year.
ProAssurance’s operating revenues for the fourth quarter grew 14.6% year over year to $222 million on higher net premiums earned and other income. The top line also surpassed the Zacks Consensus Estimate by 6.7%.
For 2016, operating revenues of $841 million increased 3.8% year over year on higher net premiums earned.
Quarterly Operational Update
Gross premiums written grew 16.1% year over year to $187.4 million. Net investment income, however, decreased 6.5% year over year to $24.7 million.
Total expense increased 12.2% year over year to $174.2 million. The rise in costs mainly stemmed from a year-over-year increase of 15% in net losses and loss adjustment expenses. Also, 3.4% higher underwriting, policy acquisition and operating expenses resulted in the increase in costs.
Financial Ratios for the Quarter
Net loss ratio improved 90 basis points (bps) from the prior-year quarter to 55.4%.
Expense ratio also improved 450 bps year over year to 31.4%.
Combined ratio improved 540 bps from the year-ago quarter to 86.8%. However, operating ratio deteriorated 220 bps to 74% from the year-earlier quarter
Return on equity displayed an improvement of 430 bps to 11.4% from the year-ago quarter. For 2016, the metric improved 240 basis points year over year to 8%.
Financial Position
As of Dec 31, 2016, ProAssurance’s total assets were $5 billion, up 2% from $4.9 billion as of Dec 31, 2015.
As of Dec 31, 2016, the insurer’s shareholder equity was $1.8 billion, down 8.2% from $1.9 billion as of Dec 31, 2015.
Book value per share declined approximately 8.4% to $33.78 as of Dec 31, 2016 from $36.88 as of Dec 31, 2015.
Share Repurchase Update
The company did not repurchase any share during the fourth quarter. In 2016, the company had repurchased a total of 44,500 shares worth $2.1 million with $110 million remaining under authorization.
Since 2007, the company has returned $1.7 billion to investors through share repurchase and dividends, including $265.7 million in regular and special dividends declared in the fourth quarter and paid in Jan 2017.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, ProAssurance's stock has a poor Growth Score of 'F', however its Momentum is doing a bit better with an 'C'. However, the stock was allocated a grade of 'F' on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for momentum based on our styles scores.
Outlook
The stock has a Zacks Rank #4 (Sell). We are looking for a below average return from the stock in the next few months.
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Why Is ProAssurance (PRA) Down 4.3% Since the Last Earnings Report?
A month has gone by since the last earnings report for ProAssurance Corporation (PRA - Free Report) . Shares have lost about 4.3% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Recent Earnings
ProAssurance (PRA - Free Report) Beats Q4 Earnings & Revenue Estimates
ProAssurance Corporation’s fourth-quarter 2016 operating earnings per share of $0.83 surpassed the Zacks Consensus Estimate by 5%. The bottom line also improved 13.6% year over year.
However, full-year 2016 operating EPS came in at $2.43, down 6.2% year over year.
ProAssurance’s operating revenues for the fourth quarter grew 14.6% year over year to $222 million on higher net premiums earned and other income. The top line also surpassed the Zacks Consensus Estimate by 6.7%.
For 2016, operating revenues of $841 million increased 3.8% year over year on higher net premiums earned.
Quarterly Operational Update
Gross premiums written grew 16.1% year over year to $187.4 million.
Net investment income, however, decreased 6.5% year over year to $24.7 million.
Total expense increased 12.2% year over year to $174.2 million. The rise in costs mainly stemmed from a year-over-year increase of 15% in net losses and loss adjustment expenses. Also, 3.4% higher underwriting, policy acquisition and operating expenses resulted in the increase in costs.
Financial Ratios for the Quarter
Net loss ratio improved 90 basis points (bps) from the prior-year quarter to 55.4%.
Expense ratio also improved 450 bps year over year to 31.4%.
Combined ratio improved 540 bps from the year-ago quarter to 86.8%.
However, operating ratio deteriorated 220 bps to 74% from the year-earlier quarter
Return on equity displayed an improvement of 430 bps to 11.4% from the year-ago quarter. For 2016, the metric improved 240 basis points year over year to 8%.
Financial Position
As of Dec 31, 2016, ProAssurance’s total assets were $5 billion, up 2% from $4.9 billion as of Dec 31, 2015.
As of Dec 31, 2016, the insurer’s shareholder equity was $1.8 billion, down 8.2% from $1.9 billion as of Dec 31, 2015.
Book value per share declined approximately 8.4% to $33.78 as of Dec 31, 2016 from $36.88 as of Dec 31, 2015.
Share Repurchase Update
The company did not repurchase any share during the fourth quarter.
In 2016, the company had repurchased a total of 44,500 shares worth $2.1 million with $110 million remaining under authorization.
Since 2007, the company has returned $1.7 billion to investors through share repurchase and dividends, including $265.7 million in regular and special dividends declared in the fourth quarter and paid in Jan 2017.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
ProAssurance Corporation Price and Consensus
ProAssurance Corporation Price and Consensus | ProAssurance Corporation Quote
VGM Scores
At this time, ProAssurance's stock has a poor Growth Score of 'F', however its Momentum is doing a bit better with an 'C'. However, the stock was allocated a grade of 'F' on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for momentum based on our styles scores.
Outlook
The stock has a Zacks Rank #4 (Sell). We are looking for a below average return from the stock in the next few months.