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Why is RLI Up 10.5% Since Its Last Earnings Report?
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A month has gone by since the last earnings report for RLI Corp. (RLI - Free Report) . Shares have added about 10.5% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is RLI due for a pullback? 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 drivers.
RLI Earnings Beat Estimates, Revenues Improve Y/Y in Q2
RLI Corp.’s second-quarter 2018 operating earnings of 60 cents per share beat the Zacks Consensus Estimate by 9.1%. However, the bottom line slipped 1.6% year over year.
The company witnessed profitable underwriting results along with improved net investment income in the reported quarter. Also, the property and casualty (P&C) insurer displayed premium growth across all its segments.
Net income improved 25.4% year over year to 74 cents per share.
Operational Performance
Operating revenues for the reported quarter totaled $211.1 million, up 6.8% year over year owing to higher net premiums earned as well as net investment income. Also, the top line outpaced the Zacks Consensus Estimate of $208 million by 1.5%.
Gross premiums written improved nearly 12% year over year to $269.8 million on the back of a solid performance by all the segments — Casualty, Property and Surety.
Total expenses increased 10.6% year over year to $186.9 million due to higher loss and settlement expenses, policy acquisition costs, insurance operating as well as general corporate expenses.
The company reported underwriting income of $14.1 million, which declined 28.4% year over year. Combined ratio deteriorated 350 basis points year over year to 92.8%.
The property and casualty (P&C) insurer’s net investment income improved nearly 10.1% year over year to $14.6 million. Total return from the investment portfolio was 0.8%.
Financial Update
The company exited the second quarter with total investments and cash of $2.2 billion, up 1.3% from the year-end 2017.
Book value was $19.17 per share as of Jun 30, 2018, down 0.8% from the tally as of Dec 31, 2017.
Long-term debt was $149 million, which inched up 0.1% from the figure at 2017-end level.
Statutory surplus grew 7.3% year over year to $927.9 million.
Net cash flow from operations surged 33.6% to $84.6 million in the quarter under review.
Dividend Payout
On Jun 20, 2018, the company paid out a cash dividend of 22 cents per share, up 4.8% from the year-ago quarter’s payment. Over the past five years, the P&C insurer’s total cumulative dividends amounted to more than $613 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. There has been one revision lower for the current quarter.
At this time, RLI has an average Growth Score of C, though it is lagging a bit on the momentum front with a D. The stock was also allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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 growth based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of this revision indicates a downward shift. Interestingly, RLI has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why is RLI Up 10.5% Since Its Last Earnings Report?
A month has gone by since the last earnings report for RLI Corp. (RLI - Free Report) . Shares have added about 10.5% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is RLI due for a pullback? 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 drivers.
RLI Earnings Beat Estimates, Revenues Improve Y/Y in Q2
RLI Corp.’s second-quarter 2018 operating earnings of 60 cents per share beat the Zacks Consensus Estimate by 9.1%. However, the bottom line slipped 1.6% year over year.
The company witnessed profitable underwriting results along with improved net investment income in the reported quarter. Also, the property and casualty (P&C) insurer displayed premium growth across all its segments.
Net income improved 25.4% year over year to 74 cents per share.
Operational Performance
Operating revenues for the reported quarter totaled $211.1 million, up 6.8% year over year owing to higher net premiums earned as well as net investment income. Also, the top line outpaced the Zacks Consensus Estimate of $208 million by 1.5%.
Gross premiums written improved nearly 12% year over year to $269.8 million on the back of a solid performance by all the segments — Casualty, Property and Surety.
Total expenses increased 10.6% year over year to $186.9 million due to higher loss and settlement expenses, policy acquisition costs, insurance operating as well as general corporate expenses.
The company reported underwriting income of $14.1 million, which declined 28.4% year over year. Combined ratio deteriorated 350 basis points year over year to 92.8%.
The property and casualty (P&C) insurer’s net investment income improved nearly 10.1% year over year to $14.6 million. Total return from the investment portfolio was 0.8%.
Financial Update
The company exited the second quarter with total investments and cash of $2.2 billion, up 1.3% from the year-end 2017.
Book value was $19.17 per share as of Jun 30, 2018, down 0.8% from the tally as of Dec 31, 2017.
Long-term debt was $149 million, which inched up 0.1% from the figure at 2017-end level.
Statutory surplus grew 7.3% year over year to $927.9 million.
Net cash flow from operations surged 33.6% to $84.6 million in the quarter under review.
Dividend Payout
On Jun 20, 2018, the company paid out a cash dividend of 22 cents per share, up 4.8% from the year-ago quarter’s payment. Over the past five years, the P&C insurer’s total cumulative dividends amounted to more than $613 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. There has been one revision lower for the current quarter.
RLI Corp. Price and Consensus
RLI Corp. Price and Consensus | RLI Corp. Quote
VGM Scores
At this time, RLI has an average Growth Score of C, though it is lagging a bit on the momentum front with a D. The stock was also allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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 growth based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of this revision indicates a downward shift. Interestingly, RLI has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.