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Allstate Corporation’s (ALL - Free Report) fourth-quarter 2018 earnings of $1.24 per share beat the Zacks Consensus Estimate by 22.8% but decreased 40.7% on a year-over-year basis.
The decrease was due to heavy catastrophe loss as well as a decline in revenues.
Revenues came in at $9.48 billion, outpacing the Zacks Consensus Estimate by 8.8%. The top line was down 5.8% year over year, due to a decline in net investment income.
In the quarter under review, total expenses increased 10.5% year over year to $9.84 billion on higher property and casualty insurance claims, and claims expense and operating costs.
The Allstate Corporation Price, Consensus and EPS Surprise
The company incurred catastrophe loss of $963 million, which was 60.8% higher year over year.
Total policies in force as of Dec 31, 2018 were 113.9 million, up 38.4% year over year.
Net investment income of $786 million declined 13.9% year over year due to lower fixed income and equity valuations.
Solid Segmental Performance
Property-Liability insurance total revenues of $8.3 billion declined 3.9% year over year due to lower investment income, partly offset by increase in premium and other revenues.
Service Businesses’ total revenues were $356 million, up 27% year over year. This upside was primarily driven by higher insurance premium, other revenues and net investment income.
Allstate Life’s total revenues of $495 million increased 2.1% year over year, driven by growth in premiums and other revenues.
Allstate Benefits’ total revenues remained almost unchanged at $292 million as the increase in premium and net investment income was almost offset by realized capital losses.
Allstate Annuities’ revenues of $63 million fell from $375 million in the year-ago quarter due to a decline in net investment income and high realized capital losses .
Share Buyback and Dividend
Allstate returned $614 million to its shareholders in common stock dividends and repurchased shares worth $2.2 billion in 2018.
Capital Position (As of Dec 31, 2018)
Total shareholders’ equity was $21.3 billion, down 5.5% year over year. Total assets were $81.3 billion, up 1.9% year over year. Long-term debt of $6.45 billion increased 1.6% year over year. Ratio of debt-to-equity was 30.3%, up 210 basis points year over year. Adjusted return on equity of 14.8% expanded 140 basis points year over year.
Among other players from the insurance industry that have reported fourth-quarter earnings so far, the bottom line of MGIC Investment Corporation (MTG - Free Report) Chubb Limited (CB - Free Report) and The Travelers Companies, Inc. (TRV - Free Report) beat the respective Zacks Consensus Estimate.
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Allstate (ALL) Q4 Earnings & Revenues Beat Estimates
Allstate Corporation’s (ALL - Free Report) fourth-quarter 2018 earnings of $1.24 per share beat the Zacks Consensus Estimate by 22.8% but decreased 40.7% on a year-over-year basis.
The decrease was due to heavy catastrophe loss as well as a decline in revenues.
Revenues came in at $9.48 billion, outpacing the Zacks Consensus Estimate by 8.8%. The top line was down 5.8% year over year, due to a decline in net investment income.
In the quarter under review, total expenses increased 10.5% year over year to $9.84 billion on higher property and casualty insurance claims, and claims expense and operating costs.
The Allstate Corporation Price, Consensus and EPS Surprise
The Allstate Corporation Price, Consensus and EPS Surprise | The Allstate Corporation Quote
The company incurred catastrophe loss of $963 million, which was 60.8% higher year over year.
Total policies in force as of Dec 31, 2018 were 113.9 million, up 38.4% year over year.
Net investment income of $786 million declined 13.9% year over year due to lower fixed income and equity valuations.
Solid Segmental Performance
Property-Liability insurance total revenues of $8.3 billion declined 3.9% year over year due to lower investment income, partly offset by increase in premium and other revenues.
Service Businesses’ total revenues were $356 million, up 27% year over year. This upside was primarily driven by higher insurance premium, other revenues and net investment income.
Allstate Life’s total revenues of $495 million increased 2.1% year over year, driven by growth in premiums and other revenues.
Allstate Benefits’ total revenues remained almost unchanged at $292 million as the increase in premium and net investment income was almost offset by realized capital losses.
Allstate Annuities’ revenues of $63 million fell from $375 million in the year-ago quarter due to a decline in net investment income and high realized capital losses .
Share Buyback and Dividend
Allstate returned $614 million to its shareholders in common stock dividends and repurchased shares worth $2.2 billion in 2018.
Capital Position (As of Dec 31, 2018)
Total shareholders’ equity was $21.3 billion, down 5.5% year over year.
Total assets were $81.3 billion, up 1.9% year over year.
Long-term debt of $6.45 billion increased 1.6% year over year.
Ratio of debt-to-equity was 30.3%, up 210 basis points year over year.
Adjusted return on equity of 14.8% expanded 140 basis points year over year.
Zacks Rank and Performance of Other Insurers
Allstate carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among other players from the insurance industry that have reported fourth-quarter earnings so far, the bottom line of MGIC Investment Corporation (MTG - Free Report) Chubb Limited (CB - Free Report) and The Travelers Companies, Inc. (TRV - Free Report) beat the respective Zacks Consensus Estimate.
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Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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