ACE Earnings Cheat Sheet: Two Straight Quarters of Profit Broken by a Loss

S&P 500 (NYSE:SPY) component ACE Limited (NYSE:ACE) reported its results for the third quarter. ACE is a global provider of property and casualty insurance and reinsurance products to individuals and businesses.

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ACE Earnings Cheat Sheet for the Third Quarter

Results: Reported a loss of $31 million (9 cents per diluted share) in the quarter. ACE Limited had a net income of $675 million or $1.97 per share in the year earlier quarter.

Actual vs. Wall St. Expectations: ACE reported adjusted net income of $2.22 per share. By that measure, the company beat the mean estimate of $1.79 per share.

Quoting Management: Evan G. Greenberg, Chairman and Chief Executive Officer of ACE Limited, commented: “ACE had outstanding operating results in what were very difficult financial market conditions. All principal businesses performed well and contributed positively to the operating results in the quarter. Revenue increased 31% and after-tax operating income was $759 million, up 10% and a record for our company. Our performance in the quarter was led by excellent current accident year underwriting results that benefited from both underwriting discipline and risk management. We also had strong contributions from our recent acquisitions and very good growth in investment income driven by portfolio construction and positive cash flow. The strength of our well-balanced portfolio of businesses was in evidence, including commercial P&C globally, personal accident and life, crop and our global presence, particularly in faster growing regions such as Asia and Latin America.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 33 cents in the second quarter, by 16 cents in the first quarter, and by 20 cents in the fourth quarter of the last fiscal year.

The company’s loss in the latest quarter follows profits in the previous three quarters. The company reported a profit of $607 million in the second quarter, a profit of $259 million in the first quarter and $1 billion in the fourth of the last fiscal year.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the fourth quarter is $1.96 per share, up from $1.92 ninety days ago. Over the past three months, the average estimate for the fiscal year has climbed from $6.14 per to share to $6.55.

Competitors to Watch: ACE Limited (NYSE:AEX), XL Group plc (NYSE:XL), Allied World Assurance Co Hldgs., AG. (NYSE:AWH), HCC Insurance Hldgs., Inc. (NYSE:HCC), Arch Capital Group Ltd. (NASDAQ:ACGL), American Intl. Group, Inc. (NYSE:AIG), Zurich Financial Services (ZFSVY), American Financial Group (NYSE:AFG), Aspen Insurance Hldgs. Ltd. (NYSE:AHL), and Fairfax Financial Hldgs. Ltd. (FRFHF).

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(Source: Xignite Financials)

 

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