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Cincinnati Financial (CINF) Q2 Earnings: What's in Store?

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Cincinnati Financial Corporation (CINF - Free Report) is slated to report second-quarter 2017 results on Aug 2 after the market closes. Last quarter, the company delivered a positive earnings surprise of 9.26%. Let’s see how things are shaping up for this announcement.

Factors to be Considered this Quarter

Cincinnati Financial is likely to report higher catastrophe losses in the soon-to-be-reported quarter, which in turn will render volatility to the company’s earnings. The company has also likely witnessed weaker underwriting results in the second quarter.

The property and casualty (P&C) insurer is also anticipated to have experienced a deterioration in its combined ratio this quarter.

In addition, the company has possibly recorded an increase in total benefits and expenses, mainly owing to higher insurance losses and contract holders’ benefits, underwriting, acquisition and insurance expenses as well as other operating costs.

However, the P&C insurer is likely to report top-line growth in the second quarter, fueled by higher premiums earned.

Furthermore, the company may also display investment income growth in the second quarter, backed by an increase in both interest and dividend income.

With respect to the surprise trend, the company delivered positive surprises in all of the last four quarters with an average beat of 7.59%.

Earnings Whispers

Our proven model does not conclusively show that Cincinnati Financial is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Zacks ESP: Cincinnati Financial has an Earnings ESP of 0.00%, which makes surprise prediction difficult. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 46 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: Cincinnati Financial carries a Zacks Rank #4 (Sell). We caution against all Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Some better-ranked companies from the insurance industry with the right combination of elements to come up with an earnings beat this quarter are as follows:

National General Holdings Corp (NGHC - Free Report) , which is set to report second-quarter earnings on Aug 7, has an Earnings ESP of +2.56% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Manulife Financial Corporation (MFC - Free Report) has an Earnings ESP of +7.32% and a Zacks Rank #2. The company is set to report second-quarter earnings on Aug 7.

Sun Life Financial Inc. (SLF - Free Report) has an Earnings ESP of +2.70% and a Zacks Rank #1. The company is slated to report second-quarter earnings on Aug 9.

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