Arch Capital Group Ltd. Second Quarter Earnings Preview

Arch Capital Group Ltd. (NASDAQ:ACGL) will unveil its latest earnings on Monday, July 25, 2011. Arch Capital Group Ltd. provides insurance and reinsurance on a worldwide basis through its wholly owned subsidiaries.

Arch Capital Group Ltd. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 20 cents per share, a decline of 75.9% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 79 cents. Between one and three months ago, the average estimate moved down and dropped from 78 cents during the last month. For the year, analysts are projecting net income of $1.63 per share, a decline of 47.8% from last year.

Past Earnings Performance: The company has beaten estimates the last four quarters and is coming off a quarter where it topped forecasts by 33 cents, reporting profit of 6 cents per share against a mean estimate of a loss of 27 cents per share.

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Wall St. Revenue Expectations: On average, analysts predict $624.8 million in revenue this quarter, a rise of 0.1% from the year ago quarter. Analysts are forecasting total revenue of $2.52 billion for the year, a rise of 0.4% from last year’s revenue of $2.51 billion.

Analyst Ratings: Analysts are bullish on Arch Capital Group as eight analysts rate it as a buy, one rates it as a sell and seven rate it as a hold.

Key Stats:

Revenue has fallen in the past four quarters. Revenue declined 8.3% to $775.1 million in first quarter. The figure fell 10.9% in the fourth quarter of the last fiscal year from the year earlier, dropped 18.3% in third quarter of the last fiscal year from the year-ago quarter and 8.5% in the second quarter of the last fiscal year.

The company has now seen net income fall in each of the last three quarters. In first quarter, net income fell 88.1% from the year earlier, while the figure fell 19.6% in the fourth quarter of the last fiscal year and 47.3% in the third quarter of the last fiscal year.

Competitors to Watch: Endurance Specialty Hldgs. Ltd. (NYSE:ENH), Alterra Capital Hldgs. Ltd. (NASDAQ:ALTE), American Insurance Group (NYSE:AIG), Allied World Assurance Co Hldgs., AG. (NYSE:AWH), PartnerRe Ltd. (NYSE:PRE), W.R. Berkley Corporation (NYSE:WRB), Everest Re Group, Ltd. (NYSE:RE), ACE Limited (NYSE:ACE), Argo Group Intl. Hldgs., Ltd. (NASDAQ:AGII), and Axis Capital Holdings Ltd. (NYSE:AXS).

Stock Price Performance: During May 20, 2011 to July 19, 2011, the stock price had fallen $2.06 (-6%) from $34.48 to $32.42. The stock price saw one of its best stretches over the last year between March 16, 2011 and March 25, 2011 when shares rose for eight-straight days, rising 6.5% (+$1.95) over that span. It saw one of its worst periods between June 2, 2011 and June 10, 2011 when shares fell for seven-straight days, falling 3.5% (-$1.19) over that span. Shares are up $3.07 (+10.5%) year to date.

(Source: Xignite Financials)

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