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RLI Corp. (RLI) Down 5.7% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for RLI Corp. (RLI - Free Report) . Shares have lost about 5.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is RLI Corp. due for a breakout? 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.
RLI Q1 Earnings and Revenues Surpass Estimates, Rise Y/Y
RLI Corp.’s first-quarter 2021 operating earnings of 87 cents per share beat the Zacks Consensus Estimate by 17.6%. Also, the bottom line increased 31.8% from the prior-year quarter.
RLI witnessed improved premiums from Casualty, Surety and Property segments along with improving combined ratio in the reported quarter.
Operational Performance
Operating revenues for the reported quarter totaled $245 million, up 5.2% year over year. This upside can be attributed to higher net premiums earned. Moreover, the top line beat the Zacks Consensus Estimate by 1.2%.
Gross premiums written increased 20% year over year to $294.9 million. This uptick can be attributed to solid performance of Casualty (up 18.6%), Surety (up 5.3%) and Property segments (up 31.4%). Net investment income decreased nearly 7.6% year over year to $16.4 million.
Total expenses increased 0.9% year over year to $203.9 million, primarily due to increased insurance operating expenses, policy acquisition costs and interest expense on debt.
The company reported underwriting income of $29.9 million, which increased 73.8% from the year-ago period due to solid performance of Casualty segment, partially offset by poor performance of the Property and Surety segments. Combined ratio improved 510 basis points (bps) year over year to 86.9%.
Financial Update
The company exited the first quarter with total investments and cash of $2.9 billion, up 1.4% from 2020 end. Book value was $25.55 per share as of Mar 31, 2021, up 1.6% from the figure as of Dec 31, 2020.
Long-term debt was $149.5 million, up 0.03% from 2020 end. Statutory surplus increased 5.9% to $1.2 billion as of Mar 31, 2021 from the number as of Dec 31, 2020. Return on equity was 29.5%, reflecting an increase of 2010 basis points year over year.
Net cash flow provided by operations was $60.3 million in the quarter under review compared to net cash flow used in operations of $5.8 million in the year-ago period.
Dividend Update
On Mar 21, the company paid out a cash dividend of 24 cents per share. Dividends totaled $495 million in the last five years. RLI has paid and increased regular dividends for 45 consecutive years.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, RLI Corp. has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. 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 this revision indicates a downward shift. Notably, RLI Corp. has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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RLI Corp. (RLI) Down 5.7% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for RLI Corp. (RLI - Free Report) . Shares have lost about 5.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is RLI Corp. due for a breakout? 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.
RLI Q1 Earnings and Revenues Surpass Estimates, Rise Y/Y
RLI Corp.’s first-quarter 2021 operating earnings of 87 cents per share beat the Zacks Consensus Estimate by 17.6%. Also, the bottom line increased 31.8% from the prior-year quarter.
RLI witnessed improved premiums from Casualty, Surety and Property segments along with improving combined ratio in the reported quarter.
Operational Performance
Operating revenues for the reported quarter totaled $245 million, up 5.2% year over year. This upside can be attributed to higher net premiums earned. Moreover, the top line beat the Zacks Consensus Estimate by 1.2%.
Gross premiums written increased 20% year over year to $294.9 million. This uptick can be attributed to solid performance of Casualty (up 18.6%), Surety (up 5.3%) and Property segments (up 31.4%). Net investment income decreased nearly 7.6% year over year to $16.4 million.
Total expenses increased 0.9% year over year to $203.9 million, primarily due to increased insurance operating expenses, policy acquisition costs and interest expense on debt.
The company reported underwriting income of $29.9 million, which increased 73.8% from the year-ago period due to solid performance of Casualty segment, partially offset by poor performance of the Property and Surety segments. Combined ratio improved 510 basis points (bps) year over year to 86.9%.
Financial Update
The company exited the first quarter with total investments and cash of $2.9 billion, up 1.4% from 2020 end. Book value was $25.55 per share as of Mar 31, 2021, up 1.6% from the figure as of Dec 31, 2020.
Long-term debt was $149.5 million, up 0.03% from 2020 end. Statutory surplus increased 5.9% to $1.2 billion as of Mar 31, 2021 from the number as of Dec 31, 2020. Return on equity was 29.5%, reflecting an increase of 2010 basis points year over year.
Net cash flow provided by operations was $60.3 million in the quarter under review compared to net cash flow used in operations of $5.8 million in the year-ago period.
Dividend Update
On Mar 21, the company paid out a cash dividend of 24 cents per share. Dividends totaled $495 million in the last five years. RLI has paid and increased regular dividends for 45 consecutive years.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, RLI Corp. has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. 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 this revision indicates a downward shift. Notably, RLI Corp. has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.