The Hartford Financial Services Group, Inc. (HIG - Free Report) will release fourth-quarter 2019 financial results on Feb 3, after the closing bell.
We expect results to reflect growth in revenues, partly offset by catastrophe losses and rise in expenses.
Now let’s see how the company is placed for fourth-quarter results.
In the fourth quarter, the company’s Property & Casualty segment is likely to have delivered solid numbers on the back of its well-performing Commercial Lines business. This, in turn, might have boosted the revenue base.
The consensus mark for written premiums from Commercial Lines suggests 25% growth from the year-earlier reported figure. Notably, the consensus estimate for core earnings from the Property and Casualty segment suggests a 162.2% rise from the year-earlier number.
The company’s bottom line is likely to have improved on the back of its healthy revenue stream.
The fourth quarter faced catastrophe events. Per the company’s last earnings call, management announced that it incurred a cat loss of $80 million in October including losses from tornadoes in the Dallas area and other wind events.
However, core earnings from the company's Group Benefits might have been affected in the quarter under review. The consensus estimate for core earnings from this segment suggests a 17.6% decline from the year-ago reported figure. This downside might reflect lower net investment income, increased investments in technology, claim management, etc. in the impending quarterly results.
Also, the company is expected to have incurred high expenses due to planned marketing and other growth initiatives in the reported quarter. Elevated expenses might have put a pressure on the margins.
For the to-be-reported quarter, the Zacks Consensus Estimate for earnings is pegged at $1.34, reflecting a 71.8% surge from the year-ago quarter.
What the Quantitative Model States
Our proven model does not conclusively predict an earnings beat for Hartford Financial this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Hartford Financial has an Earnings ESP of -0.50%. This is because the Most Accurate Estimate is pegged at $1.33, lower than the Zacks Consensus Estimate of $1.34. You can see the complete list of today’s Zacks #1 Rank stocks here.
Zacks Rank: Hartford Financial carries a Zacks Rank #3, which increases the predictive power of ESP. However, its negative ESP leaves surprise prediction inconclusive for the stock this time around.
Highlights of Q3 Earnings and Surprise History
In the last reported quarter, the company delivered adjusted operating earnings of $1.50 per share, beating the Zacks Consensus Estimate by 19% on higher revenues and its Commercial Lines business. The bottom line also improved 30.4% year over year.
The company flaunts an impressive earnings history, having delivered a positive surprise in all the trailing four quarters, the average being 17.7%.
Stocks to Consider
Here are a few stocks worth considering with the perfect mix of elements to beat on earnings in the respective upcoming releases:
American International Group, Inc. (AIG - Free Report) is slated to report fourth-quarter earnings on Feb 13. It has a Zacks Rank of 3 and an Earnings ESP of +1.59%.
Assurant, Inc. (AIZ - Free Report) is set to report fourth-quarter earnings on Feb 11. The company is Zacks #3 Ranked and has an Earnings ESP of +0.62%.
Radian Group Inc. (RDN - Free Report) is slated to announce fourth-quarter earnings on Feb 5. The stock has an Earnings ESP of +1.76% and is a #3 Ranked player.
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