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Assurant (AIZ) Up 8% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Assurant (AIZ - Free Report) . Shares have added about 8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Assurant due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Assurant Q4 Earnings and Revenues Miss Estimates
Assurant, Inc. reported fourth-quarter 2020 net operating income of $1.82 per share, which missed the Zacks Consensus Estimate by 12.5%. Moreover, the bottom line declined 19.1% from the year-ago quarter.
The earnings reflect lower real-estate owned volumes in Global Housing, and softer investment income impacting each line of business in Global Lifestyle, offset by growth in domestic pre-funded funeral policies and prior period sales of the Final Need product in Global Preneed.
Total revenues were down 3.4% year over year to $2.5 billion due to lower fees and other income (down 29.4%) and net investment income (down 20.7%). Also, the top line missed the Zacks Consensus Estimate by 1.4%.
Total benefits, loss and expenses decreased 2.3% to $2.4 billion due to lower policyholder benefits, and selling, underwriting, general and administrative expenses.
Full-Year Highlights
In 2020, Assurant delivered net operating income of $8.63 per share, which missed the Zacks Consensus Estimate by 2.8%. However, the bottom line improved 0.9% year over year.
Total revenues of $10.1 billion missed the consensus mark by 0.7% but grew 0.9% year over year.
Segmental Performance
Net earned premiums, fees and others at Global Housing decreased 3% year over year to $496.7 million, primarily due to the expected run-off of small commercial business and declines in lender-placed policies in-force from the previously disclosed financially insolvent client as well as lower real estate owned volumes. The downside was partially offset by higher premium rates in lender-placed and continued growth in specialty products and multifamily housing. The segment reported net operating income of $61.1 million, which decreased 16% year over year, primarily due to $28.2 million of higher reportable catastrophes, primarily from Hurricanes Zeta and Delta.
Net earned premiums, fees and others at Global Lifestyle decreased 2% year over year to $1.8 billion due to the impact from the mobile program contract change. Net operating income of $87.9 million declined 10% year over year primarily due to a $16.3 million reduction in investment income impacting each line of business compared to the prior year period.
Net earned premiums, fees and others at Global Preneed rose 5% year over year to $53.8 million, primarily due to growth in domestic pre-funded funeral policies and prior period sales of the Final Need product. Net operating income declined 45% year over year to $8.8 million mainly due to $4.0 million of non-recurring items and updated assumptions for the earnings pattern of new policies. Higher mortality related to COVID-19 and lower investment income from lower yields also contributed to the decrease in the quarter.
Net operating loss at Corporate & Other was $22.9 million, wider than the year-ago quarter’s $21.6 million, primarily due to lower investment income from lower asset balances and yields compared to the prior-year period. The operating loss also includes $2.3 million of severance and real estate charges related to ongoing expense discipline and the evolution of Assurant’s workplace environment.
Financial Update
The company exited the fourth quarter with total assets of $44.6 billion, up 0.8% year over year. Debt was $2.2 billion, which increased 12.2% year over year. Stockholders’ equity of $5.9 billion at the end of the quarter increased 5.3% year over year.
2021 Guidance
The company expects to provide its full-year 2021 outlook following the outcome of its evaluation of strategic alternatives, including a potential sale, of Global Preneed.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Assurant has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Assurant has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Assurant (AIZ) Up 8% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Assurant (AIZ - Free Report) . Shares have added about 8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Assurant due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Assurant Q4 Earnings and Revenues Miss Estimates
Assurant, Inc. reported fourth-quarter 2020 net operating income of $1.82 per share, which missed the Zacks Consensus Estimate by 12.5%. Moreover, the bottom line declined 19.1% from the year-ago quarter.
The earnings reflect lower real-estate owned volumes in Global Housing, and softer investment income impacting each line of business in Global Lifestyle, offset by growth in domestic pre-funded funeral policies and prior period sales of the Final Need product in Global Preneed.
Total revenues were down 3.4% year over year to $2.5 billion due to lower fees and other income (down 29.4%) and net investment income (down 20.7%). Also, the top line missed the Zacks Consensus Estimate by 1.4%.
Total benefits, loss and expenses decreased 2.3% to $2.4 billion due to lower policyholder benefits, and selling, underwriting, general and administrative expenses.
Full-Year Highlights
In 2020, Assurant delivered net operating income of $8.63 per share, which missed the Zacks Consensus Estimate by 2.8%. However, the bottom line improved 0.9% year over year.
Total revenues of $10.1 billion missed the consensus mark by 0.7% but grew 0.9% year over year.
Segmental Performance
Net earned premiums, fees and others at Global Housing decreased 3% year over year to $496.7 million, primarily due to the expected run-off of small commercial business and declines in lender-placed policies in-force from the previously disclosed financially insolvent client as well as lower real estate owned volumes. The downside was partially offset by higher premium rates in lender-placed and continued growth in specialty products and multifamily housing. The segment reported net operating income of $61.1 million, which decreased 16% year over year, primarily due to $28.2 million of higher reportable catastrophes, primarily from Hurricanes Zeta and Delta.
Net earned premiums, fees and others at Global Lifestyle decreased 2% year over year to $1.8 billion due to the impact from the mobile program contract change. Net operating income of $87.9 million declined 10% year over year primarily due to a $16.3 million reduction in investment income impacting each line of business compared to the prior year period.
Net earned premiums, fees and others at Global Preneed rose 5% year over year to $53.8 million, primarily due to growth in domestic pre-funded funeral policies and prior period sales of the Final Need product. Net operating income declined 45% year over year to $8.8 million mainly due to $4.0 million of non-recurring items and updated assumptions for the earnings pattern of new policies. Higher mortality related to COVID-19 and lower investment income from lower yields also contributed to the decrease in the quarter.
Net operating loss at Corporate & Other was $22.9 million, wider than the year-ago quarter’s $21.6 million, primarily due to lower investment income from lower asset balances and yields compared to the prior-year period. The operating loss also includes $2.3 million of severance and real estate charges related to ongoing expense discipline and the evolution of Assurant’s workplace environment.
Financial Update
The company exited the fourth quarter with total assets of $44.6 billion, up 0.8% year over year. Debt was $2.2 billion, which increased 12.2% year over year. Stockholders’ equity of $5.9 billion at the end of the quarter increased 5.3% year over year.
2021 Guidance
The company expects to provide its full-year 2021 outlook following the outcome of its evaluation of strategic alternatives, including a potential sale, of Global Preneed.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Assurant has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Assurant has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.