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RLI Corp. (RLI) Q1 Earnings and Revenues Miss Estimates
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RLI Corp.’s (RLI - Free Report) first-quarter 2020 operating earnings of 66 cents per share missed the Zacks Consensus Estimate by 9.6%. Also, the bottom line deteriorated 7% from the prior-year quarter.
RLI witnessed improved premiums from Casualty and Property segments along with increase in net investment income in the reported quarter.
Operating revenues for the reported quarter totaled $233 million, up 5.4% year over year. This upside can be attributed to higher net premiums earned and net investment income. However, the top line missed the Zacks Consensus Estimate by 1.3%.
Gross premiums written increased 6% year over year to $245.8 million. This uptick can be attributed to solid performance of Casualty and Property segments.
Total expenses increased 7.8% year over year to $202 million, primarily due to increased loss and settlement expenses, policy acquisition costs and interest expense on debt.
Net investment income rose nearly 7.3% year over year to $17.8 million. The company reported underwriting income of $17.2 million, which decreased 23.2% from the year-ago period due to poor performance of Casualty and Surety segment, partially offset by solid performance of the Property segment.
Combined ratio deteriorated 300 basis points (bps) year over year to 92%.
Financial Update
The company exited the first quarter with total investments and cash of $2.4 billion, down 5.6% from 2018 end.
Book value was $20.38 per share as of Mar 31, 2020, up 8.1% from the figure as of Dec 31, 2019.
Long-term debt was $149.3 million.
Statutory surplus decreased 8.4% to $943.1 million as of Mar 31, 2020 from the number as of Dec 31, 2019.
Return on equity was 9.4%, reflecting a decrease of 690 basis points year over year.
Net cash flow used in operations was $5.8 million in the quarter under review compared to net cash flow provided by operations of $30.8 million in the year-ago period.
Dividend Update
On Mar 20, the company paid out a cash dividend of 23 cents per share. Dividends totaled $527 million in the last five years.
Among other insurance industry players who have reported first-quarter earnings so far, the bottom line of The Progressive Corporation (PGR - Free Report) and The Travelers Companies, Inc. (TRV - Free Report) missed the respective Zacks Consensus Estimate.
Upcoming Releases
First American Financial Corporation (FAF - Free Report) is scheduled to release first-quarter earnings on Apr 23.
5 Stocks Set to Double
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Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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RLI Corp. (RLI) Q1 Earnings and Revenues Miss Estimates
RLI Corp.’s (RLI - Free Report) first-quarter 2020 operating earnings of 66 cents per share missed the Zacks Consensus Estimate by 9.6%. Also, the bottom line deteriorated 7% from the prior-year quarter.
RLI witnessed improved premiums from Casualty and Property segments along with increase in net investment income in the reported quarter.
RLI Corp. Price, Consensus and EPS Surprise
RLI Corp. price-consensus-eps-surprise-chart | RLI Corp. Quote
Operational Performance
Operating revenues for the reported quarter totaled $233 million, up 5.4% year over year. This upside can be attributed to higher net premiums earned and net investment income. However, the top line missed the Zacks Consensus Estimate by 1.3%.
Gross premiums written increased 6% year over year to $245.8 million. This uptick can be attributed to solid performance of Casualty and Property segments.
Total expenses increased 7.8% year over year to $202 million, primarily due to increased loss and settlement expenses, policy acquisition costs and interest expense on debt.
Net investment income rose nearly 7.3% year over year to $17.8 million. The company reported underwriting income of $17.2 million, which decreased 23.2% from the year-ago period due to poor performance of Casualty and Surety segment, partially offset by solid performance of the Property segment.
Combined ratio deteriorated 300 basis points (bps) year over year to 92%.
Financial Update
The company exited the first quarter with total investments and cash of $2.4 billion, down 5.6% from 2018 end.
Book value was $20.38 per share as of Mar 31, 2020, up 8.1% from the figure as of Dec 31, 2019.
Long-term debt was $149.3 million.
Statutory surplus decreased 8.4% to $943.1 million as of Mar 31, 2020 from the number as of Dec 31, 2019.
Return on equity was 9.4%, reflecting a decrease of 690 basis points year over year.
Net cash flow used in operations was $5.8 million in the quarter under review compared to net cash flow provided by operations of $30.8 million in the year-ago period.
Dividend Update
On Mar 20, the company paid out a cash dividend of 23 cents per share. Dividends totaled $527 million in the last five years.
Zacks Rank
RLI currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Among other insurance industry players who have reported first-quarter earnings so far, the bottom line of The Progressive Corporation (PGR - Free Report) and The Travelers Companies, Inc. (TRV - Free Report) missed the respective Zacks Consensus Estimate.
Upcoming Releases
First American Financial Corporation (FAF - Free Report) is scheduled to release first-quarter earnings on Apr 23.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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