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CNA Financial (CNA) Q1 Earnings Top Estimates, Premiums Up
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CNA Financial Corporation (CNA - Free Report) reported first-quarter 2018 core income of $1.03 per share, beating the Zacks Consensus Estimate by 14.4%. Also, the bottom line improved 18.4% from the year-ago quarter.
CNA Financial Corporation Price, Consensus and EPS Surprise
CNA Financial’s delivery of strong results bears evidence to a solid start of the year. The company grossed a significant amount of core income, driven by pre-tax underlying underwriting income, marking the highest level in over a decade. Moreover, the company generated core income growth in its run-off long-term care business.
This apart, the quarter witnessed improved premiums across its segments, namely Specialty, Commercial and International.
Including net realized investment gains, net income of $1.07 per share improved 11.5% year over year.
Behind First-Quarter Headlines
Net investment income grew about 4.1% year over year to $405 million owing to stable fixed income returns and lower tax rate.
Net written premiums at Property & Casualty Operations increased 11.1% year over year to $1.8 billion. Core income jumped 22% year over year to $327 million. Combined ratio improved 410 basis points (bps) on a year-over-year basis to 93.1%.
As of Mar 31, 2018, book value (excluding AOCI) was $43.57 per share, down 3.2% from Dec 31, 2017.
Segment Results
Specialty net written premiums rose 2.4% year over year to $686 million owing to increase in new business and a positive renewal change. Combined ratio improved 570 bps to 87.5%.
Commercial net written premiums improved 14.9% year over year to $832 million. Combined ratio improved 460 bps to 97.1%.
International net written premiums increased 23.9% year over year to $295 million, fueled by broad based growth across all the company’s platforms, driven by a higher new business, retention and positive renewal premium change. Combined ratio deteriorated 150 bps to 96.6%.
Life & Group Non-Core total operating revenues nudged up 1.2% year over year to $335 million. Core income skyrocketed 250% year over year to $14 million owing to favorable persistency as well as rising rates.
Corporate & Other Non-Core core loss of $60 million was considerably wider than the loss of $37 million in the year-ago quarter.
Dividend Update
The board of directors of CNA Financial announced a dividend of 30 cents per share, payable May 30 to stockholders of record as of May 14, 2018.
Among other players from the insurance industry, which have already reported first-quarter earnings, the bottom line of The Progressive Corporation (PGR - Free Report) and RLI Corp. (RLI - Free Report) outpaced the respective Zacks Consensus Estimate while that of The Travelers Companies, Inc. (TRV - Free Report) missed the same.
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CNA Financial (CNA) Q1 Earnings Top Estimates, Premiums Up
CNA Financial Corporation (CNA - Free Report) reported first-quarter 2018 core income of $1.03 per share, beating the Zacks Consensus Estimate by 14.4%. Also, the bottom line improved 18.4% from the year-ago quarter.
CNA Financial Corporation Price, Consensus and EPS Surprise
CNA Financial Corporation Price, Consensus and EPS Surprise | CNA Financial Corporation Quote
CNA Financial’s delivery of strong results bears evidence to a solid start of the year. The company grossed a significant amount of core income, driven by pre-tax underlying underwriting income, marking the highest level in over a decade. Moreover, the company generated core income growth in its run-off long-term care business.
This apart, the quarter witnessed improved premiums across its segments, namely Specialty, Commercial and International.
Including net realized investment gains, net income of $1.07 per share improved 11.5% year over year.
Behind First-Quarter Headlines
Net investment income grew about 4.1% year over year to $405 million owing to stable fixed income returns and lower tax rate.
Net written premiums at Property & Casualty Operations increased 11.1% year over year to $1.8 billion. Core income jumped 22% year over year to $327 million. Combined ratio improved 410 basis points (bps) on a year-over-year basis to 93.1%.
As of Mar 31, 2018, book value (excluding AOCI) was $43.57 per share, down 3.2% from Dec 31, 2017.
Segment Results
Specialty net written premiums rose 2.4% year over year to $686 million owing to increase in new business and a positive renewal change. Combined ratio improved 570 bps to 87.5%.
Commercial net written premiums improved 14.9% year over year to $832 million. Combined ratio improved 460 bps to 97.1%.
International net written premiums increased 23.9% year over year to $295 million, fueled by broad based growth across all the company’s platforms, driven by a higher new business, retention and positive renewal premium change. Combined ratio deteriorated 150 bps to 96.6%.
Life & Group Non-Core total operating revenues nudged up 1.2% year over year to $335 million. Core income skyrocketed 250% year over year to $14 million owing to favorable persistency as well as rising rates.
Corporate & Other Non-Core core loss of $60 million was considerably wider than the loss of $37 million in the year-ago quarter.
Dividend Update
The board of directors of CNA Financial announced a dividend of 30 cents per share, payable May 30 to stockholders of record as of May 14, 2018.
Zacks Rank
CNA Financial carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Performance of Other P&C Insurers
Among other players from the insurance industry, which have already reported first-quarter earnings, the bottom line of The Progressive Corporation (PGR - Free Report) and RLI Corp. (RLI - Free Report) outpaced the respective Zacks Consensus Estimate while that of The Travelers Companies, Inc. (TRV - Free Report) missed the same.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>