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Here's What to Expect From Arch Capital's (ACGL) Q4 Earnings
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Arch Capital Group Ltd. (ACGL - Free Report) is slated to report fourth-quarter 2022 earnings on Feb 13, after market close. The insurer delivered an earnings surprise in three of the last four quarters while missing in one, the average being 15.37%.
Factors to Consider
Premiums in the fourth quarter are expected to have benefited significant growth in professional liability, including cyber as well as a strong increase in travel lines, new business opportunities, rate increases, growth in existing accounts, growth in Australian single premium mortgage insurance and increases across most lines of business. The Zacks Consensus Estimate for net premiums earned is pegged at $2.5 billion, indicating an increase of 21% from the year-ago reported figure. We expect net premiums earned to be $2.5 billion.
Net investment income is likely to have benefited from strong positive cash flow from operations, combined with the proceeds from maturities and sales of securities and the effects of higher interest rates available in the market in the to-be-reported quarter. We expect net investment income to be $121 million.
The Zacks Consensus Estimate for investment income is pegged at $133 million, indicating a 48% increase from the year-ago reported figure.
The top line is likely to have benefited from improved earned premiums, higher net investment income and other underwriting income. The Zacks Consensus Estimate for revenues is pegged at $2.68 billion, indicating an increase of 22.5% from the year-ago reported figure. We expect total revenues to be $2.53 billion.
Expenses are expected to have increased on higher losses and loss adjustment expenses, acquisition expenses, other operating expenses and amortization of intangible assets. We expect total expenses to be $2.2 billion.
Higher-than-expected cat losses are likely to have weighed on underwriting profitability and thus, combined ratio. The Zacks Consensus Estimate for combined ratio is pegged at 85, indicating a deterioration of 700 basis points from the year-ago reported figure.
The continued share buyback is anticipated to have provided an additional boost to the bottom line.
The Zacks Consensus Estimate for fourth-quarter 2022 earnings of $1.34 per share indicates an increase of 5.5% from the year-ago quarter reported figure. We expect the bottom line to be $1.26 per share for the to-be-reported quarter.
What the Zacks Model Says
Our proven model predicts an earnings beat for Arch Capital this time around. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
Earnings ESP: Arch Capital has an Earnings ESP of +6.17%. This is because the Most Accurate Estimate of $1.42 is pegged higher than the Zacks Consensus Estimate of $1.34. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Some finance stocks with the right combination of elements to deliver an earnings beat this time around are:
Arbor Realty Trust (ABR - Free Report) has an Earnings ESP of +2.86% and a Zacks Rank of 3. The Zacks Consensus Estimate for Arbor Realty’s fourth-quarter 2022 earnings is pegged at 47 cents per share, indicating a decrease of 17.5% from the year-ago reported figure.
ABR’s earnings beat estimates in each of the four trailing quarters.
AssetMark Financial Holdings, Inc. (AMK - Free Report) has an Earnings ESP of +2.30% and a Zacks Rank of 2. The Zacks Consensus Estimate for AssetMark Financial’s fourth-quarter 2022 earnings is pegged at 44 cents per share, indicating an increase of 33.3% from the year-ago reported figure.
AMK’s earnings beat estimates in three of the last four quarters and missed in the other one.
American International Group, Inc. (AIG - Free Report) has an Earnings ESP of +8.25% and a Zacks Rank of 2. The Zacks Consensus Estimate for American International’s fourth-quarter 2022 earnings is pegged at $1.19 per share, indicating a decline of 24.6% from the year-ago reported figure.
AIG’s earnings beat estimates in three of the last four quarters and missed in the other one.
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Here's What to Expect From Arch Capital's (ACGL) Q4 Earnings
Arch Capital Group Ltd. (ACGL - Free Report) is slated to report fourth-quarter 2022 earnings on Feb 13, after market close. The insurer delivered an earnings surprise in three of the last four quarters while missing in one, the average being 15.37%.
Factors to Consider
Premiums in the fourth quarter are expected to have benefited significant growth in professional liability, including cyber as well as a strong increase in travel lines, new business opportunities, rate increases, growth in existing accounts, growth in Australian single premium mortgage insurance and increases across most lines of business. The Zacks Consensus Estimate for net premiums earned is pegged at $2.5 billion, indicating an increase of 21% from the year-ago reported figure. We expect net premiums earned to be $2.5 billion.
Net investment income is likely to have benefited from strong positive cash flow from operations, combined with the proceeds from maturities and sales of securities and the effects of higher interest rates available in the market in the to-be-reported quarter. We expect net investment income to be $121 million.
The Zacks Consensus Estimate for investment income is pegged at $133 million, indicating a 48% increase from the year-ago reported figure.
The top line is likely to have benefited from improved earned premiums, higher net investment income and other underwriting income. The Zacks Consensus Estimate for revenues is pegged at $2.68 billion, indicating an increase of 22.5% from the year-ago reported figure. We expect total revenues to be $2.53 billion.
Expenses are expected to have increased on higher losses and loss adjustment expenses, acquisition expenses, other operating expenses and amortization of intangible assets. We expect total expenses to be $2.2 billion.
Higher-than-expected cat losses are likely to have weighed on underwriting profitability and thus, combined ratio. The Zacks Consensus Estimate for combined ratio is pegged at 85, indicating a deterioration of 700 basis points from the year-ago reported figure.
The continued share buyback is anticipated to have provided an additional boost to the bottom line.
The Zacks Consensus Estimate for fourth-quarter 2022 earnings of $1.34 per share indicates an increase of 5.5% from the year-ago quarter reported figure. We expect the bottom line to be $1.26 per share for the to-be-reported quarter.
What the Zacks Model Says
Our proven model predicts an earnings beat for Arch Capital this time around. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
Earnings ESP: Arch Capital has an Earnings ESP of +6.17%. This is because the Most Accurate Estimate of $1.42 is pegged higher than the Zacks Consensus Estimate of $1.34. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Arch Capital Group Ltd. Price and EPS Surprise
Arch Capital Group Ltd. price-eps-surprise | Arch Capital Group Ltd. Quote
Zacks Rank: Arch Capital currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks to Consider
Some finance stocks with the right combination of elements to deliver an earnings beat this time around are:
Arbor Realty Trust (ABR - Free Report) has an Earnings ESP of +2.86% and a Zacks Rank of 3. The Zacks Consensus Estimate for Arbor Realty’s fourth-quarter 2022 earnings is pegged at 47 cents per share, indicating a decrease of 17.5% from the year-ago reported figure.
ABR’s earnings beat estimates in each of the four trailing quarters.
AssetMark Financial Holdings, Inc. (AMK - Free Report) has an Earnings ESP of +2.30% and a Zacks Rank of 2. The Zacks Consensus Estimate for AssetMark Financial’s fourth-quarter 2022 earnings is pegged at 44 cents per share, indicating an increase of 33.3% from the year-ago reported figure.
AMK’s earnings beat estimates in three of the last four quarters and missed in the other one.
American International Group, Inc. (AIG - Free Report) has an Earnings ESP of +8.25% and a Zacks Rank of 2. The Zacks Consensus Estimate for American International’s fourth-quarter 2022 earnings is pegged at $1.19 per share, indicating a decline of 24.6% from the year-ago reported figure.
AIG’s earnings beat estimates in three of the last four quarters and missed in the other one.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.