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Why Is ProAssurance (PRA) Up 6.5% Since Last Earnings Report?
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It has been about a month since the last earnings report for ProAssurance (PRA - Free Report) . Shares have added about 6.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is ProAssurance 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 drivers.
ProAssurance Corporation’s fourth-quarter 2018 operating earnings per share of 18 cents were in line with the Zacks Consensus Estimate. Meanwhile, the bottom line plunged 67.3% year over year, mainly due to decrease in total revenues.
Quarterly operating revenues of ProAssurance reduced 14.2% to $179.5 million from the prior-year quarter’s level due to net realized investment losses. The top line missed the Zacks Consensus Estimate by 22.3%.
Quarterly Operational Update
Gross premiums written increased 10.4% year over year to $211.6 million, primarily banking on higher premiums across Segregated Portfolio Cell Reinsurance plus Lloyd's Syndicates and Workers' Compensation segments. Moreover, net premiums earned rose 10.4% year over year.
Net investment income declined nearly 7% year over year to $24.2 million.
Net realized investment losses of the company were $46.1 million, wider than the prior-year quarter’s figure of $2.4 million.
Total expenses escalated 24.7% year over year to $218 million. This rise in costs mainly stemmed from higher net loss and loss adjustment expenses.
Quarterly Segmental Results
Specialty P&C Insurance Segment
Total revenues of $115 million inched up 0.9% year over year.
Gross premiums written were $121 million, dipping 0.2% from the year-ago quarter’s figure.
Total expenses of $120 million mounted 23.9% year over year, primarily due to net loss and loss adjustment expenses.
Workers' Compensation Segment
Total revenues of $51.4 million rose 24.1% year over year, courtesy of higher premiums.
Gross premiums written were $65 million, up 7.7% from the year-earlier period’s number.
Total expenses of $44.8 million came in at an elevation of 23.3% year over year.
Lloyd's Syndicate Segment
Total revenues of $19.1 million soared 52.1% year over year.
Gross premiums written were $25.7 million, up 95% from the figure acquired in the comparable quarter last year.
Total expenses of $28.5 million skyrocketed 166.8% year over year.
Corporate Segment
The company reported revenues of ($22) million against the year-ago quarter's revenues of $22.1 million.
Operating expenses of $3.4 million decreased 58.4% from the prior-year quarter’s level. Interest expense of $4.8 million increased 9.3% year over year.
Financial Position
As of Dec 31, 2018, ProAssurance’s total investments were $3.3 billion, down 9.1% from the number registered at year-end 2017.
At fourth-quarter end, the company’s total assets were $4.6 billion, down 6.7% from the count at 2017 end.
As of Dec 31, 2018, the insurer’s shareholder equity slipped 4.5% to $1.5 billion from the tally as of Dec 31, 2017.
Share Repurchase & Dividend Update
The company’s board of directors approved a special dividend of 50 cents per share in addition to the regular dividend of 31 cents, payable Jan 9, 2019.
Full-Year Highlights
For 2018, consolidated gross premiums written totaled $957.3 million, up 9.4% year over year. Net premiums earned were $818.9 million, up 10.9% year over year.
For the full year, net realized investment losses were $43.5 million versus the net realized investments gains of $16.4 million, reflecting market volatility.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -61.62% due to these changes.
VGM Scores
Currently, ProAssurance has a poor Growth Score of F, a grade with the same score on the momentum front. 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 F. 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. It's no surprise ProAssurance has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is ProAssurance (PRA) Up 6.5% Since Last Earnings Report?
It has been about a month since the last earnings report for ProAssurance (PRA - Free Report) . Shares have added about 6.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is ProAssurance 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 drivers.
ProAssurance Q4 Earnings Meet Estimates, Tumble Y/Y
ProAssurance Corporation’s fourth-quarter 2018 operating earnings per share of 18 cents were in line with the Zacks Consensus Estimate. Meanwhile, the bottom line plunged 67.3% year over year, mainly due to decrease in total revenues.
Quarterly operating revenues of ProAssurance reduced 14.2% to $179.5 million from the prior-year quarter’s level due to net realized investment losses. The top line missed the Zacks Consensus Estimate by 22.3%.
Quarterly Operational Update
Gross premiums written increased 10.4% year over year to $211.6 million, primarily banking on higher premiums across Segregated Portfolio Cell Reinsurance plus Lloyd's Syndicates and Workers' Compensation segments. Moreover, net premiums earned rose 10.4% year over year.
Net investment income declined nearly 7% year over year to $24.2 million.
Net realized investment losses of the company were $46.1 million, wider than the prior-year quarter’s figure of $2.4 million.
Total expenses escalated 24.7% year over year to $218 million. This rise in costs mainly stemmed from higher net loss and loss adjustment expenses.
Quarterly Segmental Results
Specialty P&C Insurance Segment
Total revenues of $115 million inched up 0.9% year over year.
Gross premiums written were $121 million, dipping 0.2% from the year-ago quarter’s figure.
Total expenses of $120 million mounted 23.9% year over year, primarily due to net loss and loss adjustment expenses.
Workers' Compensation Segment
Total revenues of $51.4 million rose 24.1% year over year, courtesy of higher premiums.
Gross premiums written were $65 million, up 7.7% from the year-earlier period’s number.
Total expenses of $44.8 million came in at an elevation of 23.3% year over year.
Lloyd's Syndicate Segment
Total revenues of $19.1 million soared 52.1% year over year.
Gross premiums written were $25.7 million, up 95% from the figure acquired in the comparable quarter last year.
Total expenses of $28.5 million skyrocketed 166.8% year over year.
Corporate Segment
The company reported revenues of ($22) million against the year-ago quarter's revenues of $22.1 million.
Operating expenses of $3.4 million decreased 58.4% from the prior-year quarter’s level. Interest expense of $4.8 million increased 9.3% year over year.
Financial Position
As of Dec 31, 2018, ProAssurance’s total investments were $3.3 billion, down 9.1% from the number registered at year-end 2017.
At fourth-quarter end, the company’s total assets were $4.6 billion, down 6.7% from the count at 2017 end.
As of Dec 31, 2018, the insurer’s shareholder equity slipped 4.5% to $1.5 billion from the tally as of Dec 31, 2017.
Share Repurchase & Dividend Update
The company’s board of directors approved a special dividend of 50 cents per share in addition to the regular dividend of 31 cents, payable Jan 9, 2019.
Full-Year Highlights
For 2018, consolidated gross premiums written totaled $957.3 million, up 9.4% year over year. Net premiums earned were $818.9 million, up 10.9% year over year.
For the full year, net realized investment losses were $43.5 million versus the net realized investments gains of $16.4 million, reflecting market volatility.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -61.62% due to these changes.
VGM Scores
Currently, ProAssurance has a poor Growth Score of F, a grade with the same score on the momentum front. 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 F. 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. It's no surprise ProAssurance has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.