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RLI Corp. (RLI) Up 3.7% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for RLI Corp. (RLI - Free Report) . Shares have added about 3.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is RLI Corp. 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.
RLI's Q2 Earnings, Revenues Top Estimates on Strong Underwriting
RLI Corp. reported second-quarter 2024 operating earnings of $1.72 per share, beating the Zacks Consensus Estimate by 27.4%. The bottom line improved 48.3% year over year.
The quarterly results reflect the continued underwriting-focused business model and the strength of its diversified portfolio.
Operational Performance
Operating revenues for the reported quarter were $413 million, up 17.6% year over year, driven by 17.6% higher net premiums earned and 18% higher net investment income. The top line beat the Zacks Consensus Estimate of $403 million.
Gross premiums written increased 11% year over year to $563.4 million. This uptick can be attributed to the solid performance of the Casualty (up 14.1%), Property (up 6.4%) and Surety segments (up 16.5%). Our estimate was $664 million.
Net investment income increased 18% year over year to $34 million. Our estimate was $39.1 million. The investment portfolio’s total return was 0.9% in the quarter. The Zacks Consensus Estimate was pegged at $37.4 million.
Total expenses increased 9.5% year over year to $314.8 million, due to higher loss and settlement expenses, higher policy acquisition costs, insurance operating expenses and general corporate expenses. Our estimate was $331.7 million.
Underwriting income increased 70% year over year to $70 million. The combined ratio improved 570 basis points (bps) year over year to 81.5. The Zacks Consensus Estimate for the metric was pegged at 95.3, while our estimate was 89.9.
Financial Update
RLI exited the quarter with total investments and cash of $3.9 billion, up 5.7% from 2023 end.
Book value was $34.64 per share as of Jun 30, 2024, up 11.9% from the figure as of Dec 31, 2023.
Net cash flow from operations was $141.8 million, down 18.7% year over year.
The statutory surplus increased 12.4% from the end of 2023 to $1.7 billion as of Jun 30, 2024.
Return on equity was 25.3%, down 2780 bps from the year-ago period.
Dividend Update
On Jun 20, 2024, RLI paid a dividend of 29 cents, an increase of 2 cents from the last payout. RLI’s cumulative dividends totaled more than $819 million in the last five years.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -14.05% due to these changes.
VGM Scores
At this time, RLI Corp. has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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. Notably, RLI Corp. has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
RLI Corp. is part of the Zacks Insurance - Property and Casualty industry. Over the past month, Travelers (TRV - Free Report) , a stock from the same industry, has gained 4.1%. The company reported its results for the quarter ended June 2024 more than a month ago.
Travelers reported revenues of $11.35 billion in the last reported quarter, representing a year-over-year change of +12%. EPS of $2.51 for the same period compares with $0.06 a year ago.
For the current quarter, Travelers is expected to post earnings of $3.84 per share, indicating a change of +96.9% from the year-ago quarter. The Zacks Consensus Estimate has changed +2.2% over the last 30 days.
Travelers has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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RLI Corp. (RLI) Up 3.7% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for RLI Corp. (RLI - Free Report) . Shares have added about 3.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is RLI Corp. 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.
RLI's Q2 Earnings, Revenues Top Estimates on Strong Underwriting
RLI Corp. reported second-quarter 2024 operating earnings of $1.72 per share, beating the Zacks Consensus Estimate by 27.4%. The bottom line improved 48.3% year over year.
The quarterly results reflect the continued underwriting-focused business model and the strength of its diversified portfolio.
Operational Performance
Operating revenues for the reported quarter were $413 million, up 17.6% year over year, driven by 17.6% higher net premiums earned and 18% higher net investment income. The top line beat the Zacks Consensus Estimate of $403 million.
Gross premiums written increased 11% year over year to $563.4 million. This uptick can be attributed to the solid performance of the Casualty (up 14.1%), Property (up 6.4%) and Surety segments (up 16.5%). Our estimate was $664 million.
Net investment income increased 18% year over year to $34 million. Our estimate was $39.1 million. The investment portfolio’s total return was 0.9% in the quarter. The Zacks Consensus Estimate was pegged at $37.4 million.
Total expenses increased 9.5% year over year to $314.8 million, due to higher loss and settlement expenses, higher policy acquisition costs, insurance operating expenses and general corporate expenses. Our estimate was $331.7 million.
Underwriting income increased 70% year over year to $70 million. The combined ratio improved 570 basis points (bps) year over year to 81.5. The Zacks Consensus Estimate for the metric was pegged at 95.3, while our estimate was 89.9.
Financial Update
RLI exited the quarter with total investments and cash of $3.9 billion, up 5.7% from 2023 end.
Book value was $34.64 per share as of Jun 30, 2024, up 11.9% from the figure as of Dec 31, 2023.
Net cash flow from operations was $141.8 million, down 18.7% year over year.
The statutory surplus increased 12.4% from the end of 2023 to $1.7 billion as of Jun 30, 2024.
Return on equity was 25.3%, down 2780 bps from the year-ago period.
Dividend Update
On Jun 20, 2024, RLI paid a dividend of 29 cents, an increase of 2 cents from the last payout. RLI’s cumulative dividends totaled more than $819 million in the last five years.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -14.05% due to these changes.
VGM Scores
At this time, RLI Corp. has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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. Notably, RLI Corp. has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
RLI Corp. is part of the Zacks Insurance - Property and Casualty industry. Over the past month, Travelers (TRV - Free Report) , a stock from the same industry, has gained 4.1%. The company reported its results for the quarter ended June 2024 more than a month ago.
Travelers reported revenues of $11.35 billion in the last reported quarter, representing a year-over-year change of +12%. EPS of $2.51 for the same period compares with $0.06 a year ago.
For the current quarter, Travelers is expected to post earnings of $3.84 per share, indicating a change of +96.9% from the year-ago quarter. The Zacks Consensus Estimate has changed +2.2% over the last 30 days.
Travelers has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.