ACE Limited Earnings: A Swing to Quarterly Profit

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 Limited Earnings Cheat Sheet

Results: Reported a profit of $640 million ($1.86 per diluted share) in the quarter. ACE Limited had a net loss of $31 million or a loss 11 cents per share in the year-earlier quarter.

Actual vs. Wall St. Expectations: ACE Limited fell in line with the mean analyst estimate of $1.86 per share.

Quoting Management: Evan G. Greenberg, Chairman and Chief Executive Officer of ACE Limited, commented: “ACE had an excellent third quarter marked by strong earnings, outstanding growth in book value, broad-based premium revenue growth and two acquisition announcements that further our global strategy. After-tax operating income was $688 million or $2.01 per share. While the drought conditions in the U.S. severely impacted our crop insurance business and reduced operating income by $0.28 per share, as a total company we delivered outstanding underwriting results as demonstrated by a P&C combined ratio of 92% and produced an operating ROE of 11.5%. Moreover, book value grew 4.7% in the quarter and is now up about 11% for the year. Premium revenue growth in the quarter was the strongest so far this year with total company net premiums written up 8.6%, or 11.1% when adjusted for the impact of foreign exchange. We continue to benefit from the favorable P&C pricing trend in North America, where we recorded strong double-digit premium growth, and internationally, excluding the impact of foreign exchange, we also registered good growth across a broad spectrum of property and casualty, accident and health, and personal lines businesses, particularly in Asia and Latin America. In the last 60 days, we closed an acquisition in Indonesia and announced two separate acquisitions that will significantly enhance our presence and capabilities in Mexico. We are optimistic about our future growth opportunities in these two exciting countries as well as globally. We believe that with our exceptional positioning, growing capabilities and strong balance sheet, our strategic options are accelerating.”

Key Stats:

The company fell in line with estimates last quarter after beating expectations in the previous two quarters. In the second quarter, it topped the mark by 25 cents, and in the first quarter, it was ahead by 15 cents.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the fourth quarter is $1.88 per share, down from $1.94 ninety days ago. Over the past three months, the average estimate for the fiscal year has climbed from $7.72 per to share to $7.94.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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