ACE Limited Earnings: Income Falls, but beats Estimates

S&P 500 (NYSE:SPY) component ACE Limited (NYSE:ACE) reported its results for the fourth 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 Fourth Quarter

Results: Net income for the property and casualty insurance company fell to $750 million ($2.20 per share) vs. $1 billion ($2.93 per share) a year earlier. This is a decline of 25.1% from the year earlier quarter.

Actual vs. Wall St. Expectations: ACE reported adjusted net income of $1.94 per share. By that measure, the company beat the mean estimate of $1.83 per share.

Quoting Management: Evan G. Greenberg, Chairman and Chief Executive Officer of ACE Limited, commented: “ACE had a very good fourth quarter and year given the record natural catastrophe losses the industry incurred globally. The financial results once again demonstrated our conservative approach to risk management and underwriting as well as the benefits of a well-diversified global spread of business. After-tax operating income for the year was $2.4 billion, our operating ROE was nearly 11% and we produced a combined ratio of 94.6%. Per share book value grew 6% for the year, bringing three-year compound annual growth to almost 19%.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 43 cents in the third quarter, by 33 cents in the second quarter, and by 16 cents in the first quarter.

The company reported a profit last quarter after being in the red the prior quarter. In the second quarter, the company booked a net loss of $607 million or a loss of $1.77 per share.

Looking Forward: Over the last 30 days, analysts have not been optimistic about the company’s next quarter performance. The average estimate for the first quarter of the next fiscal year is now $1.90 per share, down from $1.91. The average estimate for the fiscal year is now $6.87 per share, down from $6.93 sixty days ago.

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), American Financial Group (NYSE:AFG) and Aspen Insurance Hldgs. Ltd. (NYSE:AHL).

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

 

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com