ACE Limited Earnings: Two Straight Quarters of Profit Drops, but Beat Estimates

S&P 500 (NYSE:SPY) component ACE Limited (NYSE:ACE) reported its results for the second quarter. ACE Ltd is a holding company of the ACE Group of Companies. It is a global provider of insurance and reinsurance products, serving the property and casualty insurance needs of individuals and businesses in a range of industries.

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ACE Earnings Cheat Sheet for the Second Quarter

Results: Net income for the property and casualty insurance company fell to $607 million ($1.77 per share) vs. $677 million ($1.98 per share) a year earlier. This is a decline of 10.3% from the year earlier quarter.

Actual vs. Wall St. Expectations: ACE reported adjusted net income of $2.01 per share. By that measure, the company beat the mean estimate of $1.69 per share.

Quoting Management: Evan G. Greenberg, Chairman and Chief Executive Officer of ACE Limited, commented: “ACE had an excellent second quarter. Operating income was $686 million and our ROE was approximately 12.5%. Book value and book value per share grew 3% in the quarter and are up 5% and 4%, respectively, for the year. For the industry, this was another difficult quarter for natural catastrophes, while the challenges of a competitive insurance market globally and sluggish economic conditions in developed markets continue to weigh on growth. In contrast, our strategy of investing for growth, both organically and through acquisition, while resolutely maintaining underwriting discipline, continues to distinguish our company in terms of revenue growth, earnings and risk management. Our P&C net premiums grew 15% in the quarter while our combined ratio was 92.6%, which included net catastrophe losses of just over $100 million.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 16 cents in the first quarter, by 20 cents in the fourth quarter of the last fiscal year, and by 17 cents in the third quarter of the last fiscal year.

The company has now seen net income fall in each of the last two quarters. In the first quarter, net income fell 65.7% from the year earlier quarter.

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), Aspen Insurance Hldgs. Ltd. (NYSE:AHL).

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(Source: Xignite Financials)