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Assurant (AIZ) Down 2.3% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Assurant (AIZ - Free Report) . Shares have lost about 2.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Assurant 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.
Assurant, Inc. reported first-quarter 2024 net operating income of $4.78 per share, which beat the Zacks Consensus Estimate by 23.5%. The bottom line surged 73.8% year over year. Quarterly results benefited from higher net earned premiums, fees and other income and net investment income, solid performance in the Global Housing and Global Lifestyle segments. It was partially offset by higher expenses and weakness in the Corporate & Other segment.
Total revenues increased 8.9% year over year to $2.8 billion, driven by higher net earned premiums, fees and other income and net investment income. The top line beat the Zacks Consensus Estimate by 2.6%. Net investment income was up 20.4% year over year to $126.7 million, driven by higher yields and assets in fixed maturity securities, short-term investments and cash and cash equivalents. The figure was lower than our estimate of $141.7 million. Total benefits, loss and expenses increased 3.7% to $2.5 billion, mainly due to higher underwriting and selling, general and administrative expenses. The figure matched our estimate.
Segmental Performance
Revenues at Global Housing increased 14% year over year to $600.7 million, primarily driven by higher net earned premiums and net investment income. The figure was higher than our estimate of $571.3 million. Adjusted EBITDA surged nearly three-fold year over year to $192.5 million due to lower pre-tax reportable catastrophes. The figure was higher than our estimate of $99.7 million.
Revenues at Global Lifestyle rose 7.6% year over year to $2.3 billion. The increase was primarily driven by higher net earned premiums, fees and other income and net investment income. The figure was higher than our estimate of $2.2 billion. Adjusted EBITDA of $207.7 million increased 4% year over year, driven by growth in Connected Living, partially offset by lower results in Global Automotive. The rise in Connected Living was due to stronger mobile device protection results across carrier and cable operator clients in North America, higher investment income and a one-time $6.9 million client contract benefit, partially offset by new client and program implementation expenses, as well as unfavorable foreign exchange. The decline in Global Automotive was mainly due to ongoing elevated claims costs from inflation and the normalization of select ancillary products, partially offset by higher investment income. The figure was higher than our estimate of $199.1 million.
Adjusted EBITDA loss at Corporate & Other was $29.5 million, wider than the year-ago quarter’s adjusted EBITDA loss of $24.4 million. The wider loss was due to higher expenses to support enterprise growth initiatives.
Financial Position
Liquidity was $622 million as of Mar 31, 2024, which was $397 million higher than the company’s current targeted minimum level of $225 million. Total assets decreased 1.2% to $33.2 billion as of Mar 31, 2024, from the end of 2023. Total shareholders’ equity came in at $4.9 billion, up 2.3% year over year.
Share Repurchase and Dividend Update
In the first quarter, Assurant repurchased shares for $40 million. It now has $625 million remaining under the current repurchase authorization. AIZ’s total dividends amounted to $37 million in the reported quarter.
2024 Guidance
Assurant expects adjusted EBITDA, excluding reportable catastrophes, to increase by mid-single-digits, driven by growth in Global Housing and Global Lifestyle.
Global Housing’s adjusted EBITDA, excluding reportable catastrophes, is expected to increase, following significant growth in 2023, mainly driven by improving non-catastrophe loss experience, top-line growth in Homeowners and lower catastrophe reinsurance premiums.
Global Lifestyle’ adjusted EBITDA is expected to increase, mainly driven by organic growth and improved profitability in Connected Living programs. Global Automotive is expected to be flat as higher investment income is likely to be offset by continued loss pressure, with rate actions expected to drive improvement over time. The rise in Global Lifestyle will likely be partially offset by investments to support growth, including new client and program implementation expenses.
Corporate and Other Adjusted EBITDA loss is expected to be $110 million. Assurant expects adjusted earnings per share, excluding reportable catastrophes, growth rate to approximate the growth rate in adjusted EBITDA, excluding reportable catastrophes.
AIZ anticipates a depreciation expense of $130 million and continues to expect an interest expense of $107 million, amortization of purchased intangible assets of $70 million and an effective tax rate of 20-22%.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, Assurant has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Assurant has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Assurant is part of the Zacks Insurance - Multi line industry. Over the past month, CNO Financial (CNO - Free Report) , a stock from the same industry, has gained 2%. The company reported its results for the quarter ended March 2024 more than a month ago.
CNO reported revenues of $1.16 billion in the last reported quarter, representing a year-over-year change of +15%. EPS of $0.52 for the same period compares with $0.51 a year ago.
CNO is expected to post earnings of $0.73 per share for the current quarter, representing a year-over-year change of +35.2%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.4%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for CNO. Also, the stock has a VGM Score of C.
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Assurant (AIZ) Down 2.3% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Assurant (AIZ - Free Report) . Shares have lost about 2.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Assurant 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.
Assurant Q1 Earnings & Revenues Beat Estimates, Rise Y/Y
Assurant, Inc. reported first-quarter 2024 net operating income of $4.78 per share, which beat the Zacks Consensus Estimate by 23.5%. The bottom line surged 73.8% year over year. Quarterly results benefited from higher net earned premiums, fees and other income and net investment income, solid performance in the Global Housing and Global Lifestyle segments. It was partially offset by higher expenses and weakness in the Corporate & Other segment.
Total revenues increased 8.9% year over year to $2.8 billion, driven by higher net earned premiums, fees and other income and net investment income. The top line beat the Zacks Consensus Estimate by 2.6%. Net investment income was up 20.4% year over year to $126.7 million, driven by higher yields and assets in fixed maturity securities, short-term investments and cash and cash equivalents. The figure was lower than our estimate of $141.7 million. Total benefits, loss and expenses increased 3.7% to $2.5 billion, mainly due to higher underwriting and selling, general and administrative expenses. The figure matched our estimate.
Segmental Performance
Revenues at Global Housing increased 14% year over year to $600.7 million, primarily driven by higher net earned premiums and net investment income. The figure was higher than our estimate of $571.3 million. Adjusted EBITDA surged nearly three-fold year over year to $192.5 million due to lower pre-tax reportable catastrophes. The figure was higher than our estimate of $99.7 million.
Revenues at Global Lifestyle rose 7.6% year over year to $2.3 billion. The increase was primarily driven by higher net earned premiums, fees and other income and net investment income. The figure was higher than our estimate of $2.2 billion. Adjusted EBITDA of $207.7 million increased 4% year over year, driven by growth in Connected Living, partially offset by lower results in Global Automotive. The rise in Connected Living was due to stronger mobile device protection results across carrier and cable operator clients in North America, higher investment income and a one-time $6.9 million client contract benefit, partially offset by new client and program implementation expenses, as well as unfavorable foreign exchange. The decline in Global Automotive was mainly due to ongoing elevated claims costs from inflation and the normalization of select ancillary products, partially offset by higher investment income. The figure was higher than our estimate of $199.1 million.
Adjusted EBITDA loss at Corporate & Other was $29.5 million, wider than the year-ago quarter’s adjusted EBITDA loss of $24.4 million. The wider loss was due to higher expenses to support enterprise growth initiatives.
Financial Position
Liquidity was $622 million as of Mar 31, 2024, which was $397 million higher than the company’s current targeted minimum level of $225 million. Total assets decreased 1.2% to $33.2 billion as of Mar 31, 2024, from the end of 2023. Total shareholders’ equity came in at $4.9 billion, up 2.3% year over year.
Share Repurchase and Dividend Update
In the first quarter, Assurant repurchased shares for $40 million. It now has $625 million remaining under the current repurchase authorization. AIZ’s total dividends amounted to $37 million in the reported quarter.
2024 Guidance
Assurant expects adjusted EBITDA, excluding reportable catastrophes, to increase by mid-single-digits, driven by growth in Global Housing and Global Lifestyle.
Global Housing’s adjusted EBITDA, excluding reportable catastrophes, is expected to increase, following significant growth in 2023, mainly driven by improving non-catastrophe loss experience, top-line growth in Homeowners and lower catastrophe reinsurance premiums.
Global Lifestyle’ adjusted EBITDA is expected to increase, mainly driven by organic growth and improved profitability in Connected Living programs. Global Automotive is expected to be flat as higher investment income is likely to be offset by continued loss pressure, with rate actions expected to drive improvement over time. The rise in Global Lifestyle will likely be partially offset by investments to support growth, including new client and program implementation expenses.
Corporate and Other Adjusted EBITDA loss is expected to be $110 million.
Assurant expects adjusted earnings per share, excluding reportable catastrophes, growth rate to approximate the growth rate in adjusted EBITDA, excluding reportable catastrophes.
AIZ anticipates a depreciation expense of $130 million and continues to expect an interest expense of $107 million, amortization of purchased intangible assets of $70 million and an effective tax rate of 20-22%.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, Assurant has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Assurant has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Assurant is part of the Zacks Insurance - Multi line industry. Over the past month, CNO Financial (CNO - Free Report) , a stock from the same industry, has gained 2%. The company reported its results for the quarter ended March 2024 more than a month ago.
CNO reported revenues of $1.16 billion in the last reported quarter, representing a year-over-year change of +15%. EPS of $0.52 for the same period compares with $0.51 a year ago.
CNO is expected to post earnings of $0.73 per share for the current quarter, representing a year-over-year change of +35.2%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.4%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for CNO. Also, the stock has a VGM Score of C.