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Progressive (PGR) Q3 Earnings Surpass Estimates, Down Y/Y

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The Progressive Corporation’s (PGR - Free Report) third-quarter 2019 earnings per share of $1.42 beat the Zacks Consensus Estimate of $1.33. However, the bottom line declined 9% from the year-ago quarter.

Behind the Headlines

Net premiums written were $9.6 billion in the quarter under review, up 12% from $8.6 billion in the year-ago period. Net premiums earned grew 14% year over year to $9 billion.

Net realized gains on securities were $65.4 million compared with $182.1 million in the year-ago quarter.

Combined ratio — percentage of premiums paid out as claims and expenses — deteriorated 160 basis points (bps) from the prior-year quarter’s level to 91.9%.

The Progressive Corporation Price, Consensus and EPS Surprise

The Progressive Corporation Price, Consensus and EPS Surprise

The Progressive Corporation price-consensus-eps-surprise-chart | The Progressive Corporation Quote

September Numbers Solid

Operating revenues were $2.9 million, up 13.1% year over year. The improvement can be attributed to 13.1% increase in premiums, 14.1% higher investment income, 9.8% growth in fees and other revenues and 18.1% rise in service revenues.

Total expenses increased 15.8% year over year to $2.7 billion due to 16.7% rise in losses and loss adjustment expenses, 12% increase in policy acquisition costs and 13.4% higher other underwriting expenses.

In September, policies in force were impressive at the Personal Auto segment, having improved 11% from the year-ago month to 14.6 million. Special Lines improved 3% from the prior-year month’s figure to 4.6 million.

In Progressive’s Personal Auto segment, Direct Auto grew 10% year over year to 6.9 million while Agency Auto improved 12% year over year to 7.7 million.

Progressive’s Commercial Auto segment rose 8% year over year to 0.7 million. The Property business had about 2.1 million policies in force in the month, up 15% year over year.

Financial Update

Progressive’s book value per share was $23.31, as of Sep 30, 2019, up 19.6% from $19.49 as of Sep 30, 2018.

Return-on-equity in September 2019 was 32.7%, having expanded 560 bps year over year. Debt-to-total capital ratio improved 80 bps year over year to 23.8% as of Sep 30, 2019.

Zacks Rank

Progressive currently carries a Zacks Rank #3 (Hold). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

W.R. Berkley Corporation (WRB - Free Report) will release third-quarter 2019 earnings on Oct 22. The Zacks Consensus Estimate for its earnings per share stands at 67 cents.

The Travelers Companies, Inc. (TRV - Free Report) will release third-quarter 2019 earnings on Oct 22. The Zacks Consensus Estimate for earnings per share is pegged at $2.40.

Chubb Corporation (CB - Free Report) will release third-quarter 2019 earnings on Oct 29. The Zacks Consensus Estimate for earnings per share is pegged at $2.66 cents.

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