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Markel's (MKL) Q2 Earnings Beat Estimates, Revenues Miss
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Markel Group Inc. (MKL - Free Report) reported second-quarter 2024 net operating earnings per share of $25.95, which beat the Zacks Consensus Estimate by 25%. The bottom line increased 15.7% year over year.
Markel witnessed improved earned premiums and increased net investment income.
Quarterly Operational Update
Total operating revenues of $3.8 billion missed the Zacks Consensus Estimate by 0.6%. The top line, however, rose 4.7% year over year.
Earned premiums increased 2.3% to $2.1 billion in the reported quarter.
Net investment income increased 31.4% year over year to $223 million in the second quarter.
Total operating expenses increased 3.8% to $3.3 billion, owing to higher losses and loss adjustment expenses, underwriting, acquisition and insurance expenses, product expenses, and services and other expenses.
MKL’s combined ratio deteriorated 70 basis points (bps) year over year to 93.5 in the reported quarter.
Markel Group Inc. Price, Consensus and EPS Surprise
Insurance: Gross premiums increased 2% year over year to $2.5 billion. The uptick was driven by new business growth and more favorable rates within personal lines, programs, marine and energy and property product lines.
Underwriting profit came in at $133 million, down 1% year over year. The combined ratio deteriorated 30 bps year over year to 92.9
Reinsurance: Gross premiums increased 50% year over year to $420.7 billion. The increase can be attributed to the impact of favorable timing differences and increases in renewals due to increased participation within professional liability product lines.
Underwriting profit was $1.3 million, down 91% year over year. The combined ratio deteriorated 520 bps year over year to 99.5 in the second quarter of 2024.
Markel Ventures: Operating revenues of $1.5 billion improved 5% year over year. The growth was driven by higher revenues across many of its product businesses due in part to increased demand.
Operating income of $177.5 million increased 4% year over year, driven by the positive impact of consumer and building products businesses, which witnessed higher revenues and operating margins as a result of declines in the cost of materials, freight and labor.
Financial Update
Markel exited the second quarter of 2024 with cash and cash equivalents of $4.2 billion, down 2.7% from the 2023 end level.
The debt balance increased 16.4% year over year to $4.4 billion as of Jun 30, 2024 from 2023 end level.
Shareholders' equity was $15.8 billion at second-quarter 2024 end, up 5.8% from 2023 end.
Net cash provided by operating activities was $1.2 billion in the first half, up 19.9% year over year, reflecting higher net premium collections.
Honeywell International Inc. (HON - Free Report) reported second-quarter 2024 adjusted earnings of $2.49 per share, which surpassed the Zacks Consensus Estimate of $2.42. The bottom line rose 8% year over year on an adjusted basis. On a reported basis, the company’s earnings were $2.36 per share, reflecting an increase of 6%.
Total revenues of $9.6 billion beat the consensus estimate of $9.4 billion. The top line inched up 5% from the year-ago quarter.
Danaher Corporation’s (DHR - Free Report) second-quarter adjusted earnings (excluding 50 cents from non-recurring items) of $1.72 per share surpassed the Zacks Consensus Estimate of $1.57. The bottom line declined 0.6% year over year.
Danaher’s net sales of $5.7 billion outperformed the consensus estimate of $5.6 billion. However, the metric declined 3% year over year.
3M Company (MMM - Free Report) delivered adjusted earnings of $1.93 per share in second-quarter 2024, which surpassed the Zacks Consensus Estimate of $1.66. The metric increased from earnings of $1.39 per share reported in the year-ago quarter.
The company’s adjusted net revenues of $6.02 billion outperformed the Zacks Consensus Estimate of $5.89 billion. The metric increased 1.1% year over year, driven by organic sales growth of 1.2%. Foreign currency translation had a negative impact of 1.4%, while acquisitions boosted the top line by 1.3%.
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Markel's (MKL) Q2 Earnings Beat Estimates, Revenues Miss
Markel Group Inc. (MKL - Free Report) reported second-quarter 2024 net operating earnings per share of $25.95, which beat the Zacks Consensus Estimate by 25%. The bottom line increased 15.7% year over year.
Markel witnessed improved earned premiums and increased net investment income.
Quarterly Operational Update
Total operating revenues of $3.8 billion missed the Zacks Consensus Estimate by 0.6%. The top line, however, rose 4.7% year over year.
Earned premiums increased 2.3% to $2.1 billion in the reported quarter.
Net investment income increased 31.4% year over year to $223 million in the second quarter.
Total operating expenses increased 3.8% to $3.3 billion, owing to higher losses and loss adjustment expenses, underwriting, acquisition and insurance expenses, product expenses, and services and other expenses.
MKL’s combined ratio deteriorated 70 basis points (bps) year over year to 93.5 in the reported quarter.
Markel Group Inc. Price, Consensus and EPS Surprise
Markel Group Inc. price-consensus-eps-surprise-chart | Markel Group Inc. Quote
Segment Update
Insurance: Gross premiums increased 2% year over year to $2.5 billion. The uptick was driven by new business growth and more favorable rates within personal lines, programs, marine and energy and property product lines.
Underwriting profit came in at $133 million, down 1% year over year. The combined ratio deteriorated 30 bps year over year to 92.9
Reinsurance: Gross premiums increased 50% year over year to $420.7 billion. The increase can be attributed to the impact of favorable timing differences and increases in renewals due to increased participation within professional liability product lines.
Underwriting profit was $1.3 million, down 91% year over year. The combined ratio deteriorated 520 bps year over year to 99.5 in the second quarter of 2024.
Markel Ventures: Operating revenues of $1.5 billion improved 5% year over year. The growth was driven by higher revenues across many of its product businesses due in part to increased demand.
Operating income of $177.5 million increased 4% year over year, driven by the positive impact of consumer and building products businesses, which witnessed higher revenues and operating margins as a result of declines in the cost of materials, freight and labor.
Financial Update
Markel exited the second quarter of 2024 with cash and cash equivalents of $4.2 billion, down 2.7% from the 2023 end level.
The debt balance increased 16.4% year over year to $4.4 billion as of Jun 30, 2024 from 2023 end level.
Shareholders' equity was $15.8 billion at second-quarter 2024 end, up 5.8% from 2023 end.
Net cash provided by operating activities was $1.2 billion in the first half, up 19.9% year over year, reflecting higher net premium collections.
Zacks Rank
Markel currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Some Other Diversified Operators
Honeywell International Inc. (HON - Free Report) reported second-quarter 2024 adjusted earnings of $2.49 per share, which surpassed the Zacks Consensus Estimate of $2.42. The bottom line rose 8% year over year on an adjusted basis. On a reported basis, the company’s earnings were $2.36 per share, reflecting an increase of 6%.
Total revenues of $9.6 billion beat the consensus estimate of $9.4 billion. The top line inched up 5% from the year-ago quarter.
Danaher Corporation’s (DHR - Free Report) second-quarter adjusted earnings (excluding 50 cents from non-recurring items) of $1.72 per share surpassed the Zacks Consensus Estimate of $1.57. The bottom line declined 0.6% year over year.
Danaher’s net sales of $5.7 billion outperformed the consensus estimate of $5.6 billion. However, the metric declined 3% year over year.
3M Company (MMM - Free Report) delivered adjusted earnings of $1.93 per share in second-quarter 2024, which surpassed the Zacks Consensus Estimate of $1.66. The metric increased from earnings of $1.39 per share reported in the year-ago quarter.
The company’s adjusted net revenues of $6.02 billion outperformed the Zacks Consensus Estimate of $5.89 billion. The metric increased 1.1% year over year, driven by organic sales growth of 1.2%. Foreign currency translation had a negative impact of 1.4%, while acquisitions boosted the top line by 1.3%.