A month has gone by since the last earnings report for Alleghany Corporation . Shares have lost about 2.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Alleghany Q1 Earnings Miss, Revenues Beat Estimates
Alleghany reported first-quarter 2017 operating earnings of $7.29 per share missed the Zacks Consensus Estimate of $8.29 by 12.1%. The bottom line declined 22% from the prior-year quarter.
The company witnessed strong investment performance and solid underwriting discipline in the quarter.
Including one-time items, the company reported net income of $9.67 per share, down 3% year over year.
Operational Update
Operating revenues of $1.5 billion inched up 1% year over year. Revenues surpassed the Zacks Consensus Estimate of $1.4 billion.
Net premiums written declined 6.7% year over year to $1.2 billion.
Net investment income came in at $106.1 million in the quarter, up 10% year over year. The improvement was driven by higher returns from equity investment in Ares and investment returns in Ares managed funds.
Interest expenses were $20.9 million, up 3% year over year.
Underwriting profit declined 32.5% to $101.4 million.
Segment Update
Reinsurance Segment: Net premiums written decreased 10.1% to $949.4 million owing to lower premiums related to a large whole account quota share treaty. Underwriting profit decreased 44.1% to $53.4 million.
Insurance Segment: Net premiums written increased 0.6% to $283.7 million driven by growth at PacificComp and CapSpecialty as well as an increase at RSUI. Underwriting profit decreased 12.2% to $48 million.
Financial Update
Alleghany exited the quarter with cash of $624.1 million as against $594.1 million at the end of 2016.
Debt balance of $1.5 billion was flat with Dec 2016-end level.
Alleghany’s shareholder equity at the end of the quarter was $8.2 billion compared with $7.9 billion at the 2016-end level.
Book value per share increased 3% from year-end 2016 to $530.86 as of Mar 31, 2017.
Share Repurchase Update
Alleghany did not repurchase any shares in the quarter. The company has $379.2 million shares available for repurchase.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last month as none of them issued any earnings estimate revisions.
Alleghany Corporation Price and Consensus
VGM Scores
At this time, the stock has a subpar Growth Score of 'D', however its momentum is doing a bit better with a 'C'. Charting the exact same path, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% 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.
Our style scores indicate that the stock is equally suitable for momentum and value investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Alleghany (Y) Down 2.6% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Alleghany Corporation . Shares have lost about 2.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Alleghany Q1 Earnings Miss, Revenues Beat Estimates
Alleghany reported first-quarter 2017 operating earnings of $7.29 per share missed the Zacks Consensus Estimate of $8.29 by 12.1%. The bottom line declined 22% from the prior-year quarter.
The company witnessed strong investment performance and solid underwriting discipline in the quarter.
Including one-time items, the company reported net income of $9.67 per share, down 3% year over year.
Operational Update
Operating revenues of $1.5 billion inched up 1% year over year. Revenues surpassed the Zacks Consensus Estimate of $1.4 billion.
Net premiums written declined 6.7% year over year to $1.2 billion.
Net investment income came in at $106.1 million in the quarter, up 10% year over year. The improvement was driven by higher returns from equity investment in Ares and investment returns in Ares managed funds.
Interest expenses were $20.9 million, up 3% year over year.
Underwriting profit declined 32.5% to $101.4 million.
Segment Update
Reinsurance Segment: Net premiums written decreased 10.1% to $949.4 million owing to lower premiums related to a large whole account quota share treaty. Underwriting profit decreased 44.1% to $53.4 million.
Insurance Segment: Net premiums written increased 0.6% to $283.7 million driven by growth at PacificComp and CapSpecialty as well as an increase at RSUI. Underwriting profit decreased 12.2% to $48 million.
Financial Update
Alleghany exited the quarter with cash of $624.1 million as against $594.1 million at the end of 2016.
Debt balance of $1.5 billion was flat with Dec 2016-end level.
Alleghany’s shareholder equity at the end of the quarter was $8.2 billion compared with $7.9 billion at the 2016-end level.
Book value per share increased 3% from year-end 2016 to $530.86 as of Mar 31, 2017.
Share Repurchase Update
Alleghany did not repurchase any shares in the quarter. The company has $379.2 million shares available for repurchase.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last month as none of them issued any earnings estimate revisions.
Alleghany Corporation Price and Consensus
Alleghany Corporation Price and Consensus | Alleghany Corporation Quote
VGM Scores
At this time, the stock has a subpar Growth Score of 'D', however its momentum is doing a bit better with a 'C'. Charting the exact same path, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% 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.
Our style scores indicate that the stock is equally suitable for momentum and value investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.