XL Group (XL) Q1 Earnings Beat, Revenues Miss Estimates
Zacks Investment Research | Apr 26, 2017 09:54PM ET
XL Group Ltd’s (NYSE:XL) first-quarter 2017 operating net income of 50 cents per share outpaced the Zacks Consensus Estimate by 8.7%. Moreover, earnings improved 42.9% year over year, primarily due to the company’s solid performance and continued lower operating expenses.
Including non-recurring items, net income skyrocketed 714.3% year over year to 57 cents per share.
Behind the Headlines
Total revenue of XL Group grew 6.5% year over year to $2.74 billion due to higher net premiums earned. However, revenues narrowly missed the Zacks Consensus Estimate.
Net premiums earned grew 7.1% year over year to $2.5 billion.
Net investment income declined 2.6% year over year to $200.5 million.
Pre-tax cat losses, net of reinsurance and reinstatement premiums, were $96.1 million. The reported figure was significantly wider than a loss of $52.8 million in the year-ago quarter.
Total expenses of XL Group rose 9.4% year over year to $2.5 billion owing to higher net losses and loss expenses incurred, claims and policy benefits, as well as acquisition costs.
With respect to Property and Casualty operations, gross premiums written in the quarter grew 6% year over year to $4.6 billion.
The insurance segment witnessed an improvement in premiums, primarily owing to growth in North America Construction as well as International Casualty and International Property business lines.
Also, the reinsurance segment displayed premium growth in the reported quarter. Increased global client management efforts, which resulted in improved retention of existing business and better growth opportunities, drove the upside.
XL Group’s underwriting profit decreased 18% year over year to approximately $144 million. Combined ratio deteriorated 180 basis points to 94.3% in the reported quarter.
Financial Update
XL Group exited the first quarter with cash and cash equivalents of $3.35 billion, down 2.2% from $3.43 billion at the end of 2016.
Notes payable and debt at the end of the quarter was $2.65 billion, flat with the 2016-end level.
As of Mar 31, 2017, diluted book value of XL Group was $41.10 per share, up 1.9% from Dec 31, 2016.
Share Repurchase Update
In the first quarter, XL Group bought back approximately 5.1 million shares worth $200.5 million. As of Mar 31, 2017, XL Group had shares worth $900 million remaining under its authorization.
XL Group Ltd. Price, Consensus and EPS Surprise
Zacks Investment Research
Get The News You Want
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.