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Cincinnati Financial (CINF) Misses on Q1 Earnings & Revenues
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Cincinnati Financial Corporation (CINF - Free Report) reported first-quarter 2018 operating income of 72 cents per share, which missed the Zacks Consensus Estimate of 82 cents by 12.2%. Nonetheless, the bottom line improved 22% year over year, mainly on higher revenues and a solid segmental performance.
Cincinnati Financial Corporation Price, Consensus and EPS Surprise
Including net realized investment loss of 91 cents per share, the company’s net loss came in at 19 cents versus the net income of $1.21 in the year-ago quarter.
Operational Update
Total operating revenues in the quarter under review were $1.4 billion, up 3.8% year over year. The revenue growth was driven by 4.3% higher premiums earned and a 0.7% rise in investment income. However, the top line missed the Zacks Consensus Estimate by 0.6%.
Total benefits and expenses of Cincinnati Financial increased 2.2% year over year to $1.3 billion, primarily due to higher underwriting, acquisition and insurance expenses plus insurance loss and contract holders’ benefits.
Combined ratio — a measure of underwriting profitability — improved 180 basis points (bps) year over year to 97.9%.
Cincinnati Financial had 1,724 agency relationships as of Mar 31, 2018 compared with 1,643 as of Mar 31, 2017.
Quarterly Segment Update
Commercial Lines Insurance: Total revenues of $792 million grew 1.3% year over year. This upside was primarily driven by an increase in premiums earned as well as fee revenues. The company delivered an underwriting profit of $15 million against the year-ago loss of $2 million. Combined ratio also improved 210 bps year over year to 98.3%.
Personal Lines Insurance: Total revenues of $326 million rose 7.9% year over year owing to a noticeable increase in premiums earned. The segment incurred an underwriting loss of $9 million, narrower than the year-ago loss of $15 million. Moreover, combined ratio improved 230 bps year over year to 103.2%.
Excess and Surplus Lines Insurance: Total revenues of $56 million increased 16.7% year over year. The segment’s underwriting profit of $18 million remained flat year over year. Combined ratio deteriorated 650 bps year over year to 68.8%.
Life Insurance: Total revenues of $99 million declined 2.9% year over year. Total benefits and expenses increased 1.2% year over year to $83 million.
Financial Update
As of Mar 31, 2018, Cincinnati Financial had total assets worth $21.5 billion, up 1.7% from the 2017-end level.
Cincinnati Financial’s debt-to-capital ratio was 9.3% as of Mar 31, 2018, reflecting a slight deterioration from 9.0% at the end of 2017.
As of Mar 31, 2018, Cincinnati Financial’s book value per share was $48.42, down 3.7% from Dec 31, 2017.
Zacks Rank
Cincinnati Financial carries a Zacks Rank #4 (Sell).
Among other players from the same space, which have already reported first-quarter earnings, the bottom line of The Progressive Corporation (PGR - Free Report) and RLI Corp. (RLI - Free Report) outpaced the respective Zacks Consensus Estimate while The Travelers Companies, Inc. (TRV - Free Report) missed the same.
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Cincinnati Financial (CINF) Misses on Q1 Earnings & Revenues
Cincinnati Financial Corporation (CINF - Free Report) reported first-quarter 2018 operating income of 72 cents per share, which missed the Zacks Consensus Estimate of 82 cents by 12.2%. Nonetheless, the bottom line improved 22% year over year, mainly on higher revenues and a solid segmental performance.
Cincinnati Financial Corporation Price, Consensus and EPS Surprise
Cincinnati Financial Corporation Price, Consensus and EPS Surprise | Cincinnati Financial Corporation Quote
Including net realized investment loss of 91 cents per share, the company’s net loss came in at 19 cents versus the net income of $1.21 in the year-ago quarter.
Operational Update
Total operating revenues in the quarter under review were $1.4 billion, up 3.8% year over year. The revenue growth was driven by 4.3% higher premiums earned and a 0.7% rise in investment income. However, the top line missed the Zacks Consensus Estimate by 0.6%.
Total benefits and expenses of Cincinnati Financial increased 2.2% year over year to $1.3 billion, primarily due to higher underwriting, acquisition and insurance expenses plus insurance loss and contract holders’ benefits.
Combined ratio — a measure of underwriting profitability — improved 180 basis points (bps) year over year to 97.9%.
Cincinnati Financial had 1,724 agency relationships as of Mar 31, 2018 compared with 1,643 as of Mar 31, 2017.
Quarterly Segment Update
Commercial Lines Insurance: Total revenues of $792 million grew 1.3% year over year. This upside was primarily driven by an increase in premiums earned as well as fee revenues. The company delivered an underwriting profit of $15 million against the year-ago loss of $2 million. Combined ratio also improved 210 bps year over year to 98.3%.
Personal Lines Insurance: Total revenues of $326 million rose 7.9% year over year owing to a noticeable increase in premiums earned. The segment incurred an underwriting loss of $9 million, narrower than the year-ago loss of $15 million. Moreover, combined ratio improved 230 bps year over year to 103.2%.
Excess and Surplus Lines Insurance: Total revenues of $56 million increased 16.7% year over year. The segment’s underwriting profit of $18 million remained flat year over year. Combined ratio deteriorated 650 bps year over year to 68.8%.
Life Insurance: Total revenues of $99 million declined 2.9% year over year. Total benefits and expenses increased 1.2% year over year to $83 million.
Financial Update
As of Mar 31, 2018, Cincinnati Financial had total assets worth $21.5 billion, up 1.7% from the 2017-end level.
Cincinnati Financial’s debt-to-capital ratio was 9.3% as of Mar 31, 2018, reflecting a slight deterioration from 9.0% at the end of 2017.
As of Mar 31, 2018, Cincinnati Financial’s book value per share was $48.42, down 3.7% from Dec 31, 2017.
Zacks Rank
Cincinnati Financial carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other P&C Insurers
Among other players from the same space, which have already reported first-quarter earnings, the bottom line of The Progressive Corporation (PGR - Free Report) and RLI Corp. (RLI - Free Report) outpaced the respective Zacks Consensus Estimate while The Travelers Companies, Inc. (TRV - Free Report) missed the same.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>