The HartFord (HIG) Q1 Earnings Miss, Revenues Increase Y/Y
Zacks Investment Research | Apr 27, 2017 10:08PM ET
The Hartford Financial Services Group, Inc. (NYSE:HIG) reported first-quarter 2017 adjusted operating earnings of $1.00 per share, which missed the Zacks Consensus Estimate of $1.02 by roughly 2%. Earnings, however, grew 5.3% year over year.
The increase in earnings per diluted share reflects a 17% improvement in net income and a 7% reduction in weighted average diluted common shares outstanding in first quarter 2017, both on a year-over-year basis. The reduction in weighted average diluted common shares outstanding was primarily due to the company's repurchase of 29.1 million common shares for a total of $1.3 billion over the last four quarters.
Total operating revenue of The Hartford came in at $4.6 billion, up 2.4% year over year. The top-line improvement was primarily driven by a 5% increase in net investment income and a 2% rise in earned premiums, both on a year-over-year basis.
Quarterly Segment Results
Property & Casualty (P&C):
Commercial Line
During the first quarter, Commercial Lines operating revenues were $1.9 billion, up 8% year over year.
Commercial Lines net income grew 3% to $231 million over the prior-year quarter due to favorable change in net realized capital gains and higher net investment income.
Commercial Lines underlying combined ratio was 90.9%, up 130 basis points (bps) year over year primarily due to higher current accident year commercial auto and general liability loss costs.
Personal Lines
Personal Lines total revenue was $1 billion, down 2.7% year over year. This was due to lower new business and lesser policy count retention.
This segment generated net income of $33 million, up 43% year over year, primarily due to higher underwriting gain and net investment income.
The Personal Lines underlying combined ratio was 91.2, up 150 bps from first-quarter 2016. This was primarily due to higher auto liability and non-catastrophe homeowners’ losses.
Group Benefits:
Group Benefits’ total revenue grew 6% to $938 million due to strong persistency and increased pricing.
This segment generated net income of $50 million, down 10% year over year. This was primarily due to a state guaranty fund assessment of $13 million, after-tax, related to the liquidation of a Pennsylvania long-term care insurance company.
Total loss ratio of 77.7% remained flat with first-quarter 2016. This was due to a slight improvement in group life owing to lower incidence. Also, a modest deterioration in group disability due to an increase in expected long-term disability claim severity contributed to the result.
Get The News You Want
Mutual Funds:
Mutual Funds operating revenues grew 15% year over year to $192 million.
Mutual Funds net income of $23 million rose 15% over the last-year quarter. The upside was driven by higher revenues as a result of the 14% increase in assets under management (AUM) over the past year.
Average AUM increased 14% year over year to $103.2 billion, mainly due to market appreciation and the addition of Schroders (LON:SDR) Mutual Funds.
Talcott Resolution:
Talcott Resolution operating revenues grew 10.2% year over year to $531 million.
Talcott Resolution net income was $68 million compared with $17 million in first-quarter 2016. This was due to lower net realized capital losses in first quarter 2017.
Corporate:
Corporate segment declined 37.5% year over year to $5 million.
The Corporate segment recorded net loss of $46 million, wider than a net loss of $29 million in the prior-year quarter. This was due to a $25 million income tax benefit related to the reduction of the deferred tax valuation allowance on capital loss carry-forward.
Hartford Financial Services Group, Inc. (The) Price, Consensus and EPS Surprise
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.