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Why Is W.R. Berkley (WRB) Up 4.2% Since Last Earnings Report?
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It has been about a month since the last earnings report for W.R. Berkley (WRB - Free Report) . Shares have added about 4.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is W.R. Berkley 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.
W.R. Berkley Q1 Earnings Miss Estimates, Revenues Beat
W.R. Berkley Corporation’s first-quarter 2020 operating income of 69 cents per share missed the Zacks Consensus Estimate by 2.8%. The bottom line also plunged 26.6% year over year.
Nevertheless, the company benefited from high premiums and strong net investment income. However, the COVID-19 pandemic had an adverse effect on the company’s results.
Behind the Headlines
Operating revenues of nearly $2 billion were up 2.6% year over year. The top line also surpassed the Zacks Consensus Estimate by 3%.
W.R. Berkley’s net premiums written were $1.8 billion, up nearly 8% year over year. Higher premiums written at both the Insurance and Reinsurance & Monoline Excess segments contributed to this upside.
Net investment income improved 10.4% year over year to $174.8 million. Total expenses moved up 6.4% to $1.8 billion, primarily on higher losses and loss expenses and expenses from non-insurance businesses.
Catastrophe loss totaled $87.9 million in the quarter, which reflects a whopping rise of 594.2% year over year. Creation of provision for handling COVID-19 related claims primarily led to increased catastrophe loss.
Consolidated combined ratio (a measure of underwriting profitability) was 96.9%, deteriorating 260 basis points (bps) year over year.
Segmental Details
Net premiums written at the Insurance segment grew 5.7% year over year to $1.6 billion in the quarter. Combined ratio deteriorated 240 bps year over year to 96.4%.
Net premiums written in the Reinsurance & Monoline Excess segment increased 23.7% year over year to $262.5 million. Combined ratio deteriorated 380 bps year over year to 100.6%.
Financial Update
W.R. Berkley exited the first quarter with total assets worth $26.1 billion, down 2.1% from the 2019-end figure.
Book value per share declined 7.8% from the level at 2019 end to $30.55 as of Mar 31, 2020.
Cash flow from operations totaled $152.6 million in the quarter, which surged 94.8% year over year.
In the quarter under review, the company’s negative return on equity (ROE) of 0.3% compares unfavorably with the prior-year quarter’s ROE of 13.3%.
Share Repurchase and Dividend Update
In the first quarter, W.R. Berkley bought back shares worth $203 million returned $20 million of ordinary dividends to its shareholders.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -34.92% due to these changes.
VGM Scores
At this time, W.R. Berkley has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, 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 C. 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, W.R. Berkley has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is W.R. Berkley (WRB) Up 4.2% Since Last Earnings Report?
It has been about a month since the last earnings report for W.R. Berkley (WRB - Free Report) . Shares have added about 4.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is W.R. Berkley 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.
W.R. Berkley Q1 Earnings Miss Estimates, Revenues Beat
W.R. Berkley Corporation’s first-quarter 2020 operating income of 69 cents per share missed the Zacks Consensus Estimate by 2.8%. The bottom line also plunged 26.6% year over year.
Nevertheless, the company benefited from high premiums and strong net investment income. However, the COVID-19 pandemic had an adverse effect on the company’s results.
Behind the Headlines
Operating revenues of nearly $2 billion were up 2.6% year over year. The top line also surpassed the Zacks Consensus Estimate by 3%.
W.R. Berkley’s net premiums written were $1.8 billion, up nearly 8% year over year. Higher premiums written at both the Insurance and Reinsurance & Monoline Excess segments contributed to this upside.
Net investment income improved 10.4% year over year to $174.8 million.
Total expenses moved up 6.4% to $1.8 billion, primarily on higher losses and loss expenses and expenses from non-insurance businesses.
Catastrophe loss totaled $87.9 million in the quarter, which reflects a whopping rise of 594.2% year over year. Creation of provision for handling COVID-19 related claims primarily led to increased catastrophe loss.
Consolidated combined ratio (a measure of underwriting profitability) was 96.9%, deteriorating 260 basis points (bps) year over year.
Segmental Details
Net premiums written at the Insurance segment grew 5.7% year over year to $1.6 billion in the quarter. Combined ratio deteriorated 240 bps year over year to 96.4%.
Net premiums written in the Reinsurance & Monoline Excess segment increased 23.7% year over year to $262.5 million. Combined ratio deteriorated 380 bps year over year to 100.6%.
Financial Update
W.R. Berkley exited the first quarter with total assets worth $26.1 billion, down 2.1% from the 2019-end figure.
Book value per share declined 7.8% from the level at 2019 end to $30.55 as of Mar 31, 2020.
Cash flow from operations totaled $152.6 million in the quarter, which surged 94.8% year over year.
In the quarter under review, the company’s negative return on equity (ROE) of 0.3% compares unfavorably with the prior-year quarter’s ROE of 13.3%.
Share Repurchase and Dividend Update
In the first quarter, W.R. Berkley bought back shares worth $203 million returned $20 million of ordinary dividends to its shareholders.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -34.92% due to these changes.
VGM Scores
At this time, W.R. Berkley has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, 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 C. 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, W.R. Berkley has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.