Arch Capital Group Ltd. Third Quarter Earnings Sneak Peek

Arch Capital Group Ltd. (NASDAQ:ACGL) will unveil its latest earnings on Tuesday, October 25, 2011. Arch Capital Group 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 net income of 63 cents per share, a decline of 25.9% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 56 cents. Between one and three months ago, the average estimate moved up. It has dropped from 64 cents during the last month. Analysts are projecting profit to rise by 37.5% versus last year to $1.95.

Past Earnings Performance: Last quarter, the company beat estimates by 25 cents, coming in at profit of 45 cents a share versus the estimate of net income of 20 cents a share. It marked the fourth straight quarter of beating estimates.

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Wall St. Revenue Expectations: Analysts are projecting a rise of 3.5% in revenue from the year-earlier quarter to $658.3 million.

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.

A Look Back: In the second quarter, profit fell 59.6% to $98.3 million (67 cents a share) from $243.5 million ($1.48 a share) the year earlier, but exceeded analyst expectations. Revenue was unchanged at $775.6 million.

Key Stats:

Revenue has fallen in the past four quarters. Revenue declined 8.3% in the first quarter from the year earlier, dropped 10.9% in fourth quarter of the last fiscal year from the year-ago quarter and 18.3% in the third quarter of the last fiscal year.

While the company has been profitable for the last eight quarters, income has fallen year over year by an average of 53.7% over the past four quarters. The quarter hit the hardest was the first quarter, that saw an 88.1% drop.

Competitors to Watch: Endurance Specialty Hldgs. Ltd. (NYSE:ENH), Alterra Capital Hldgs. Ltd. (NASDAQ:ALTE), Fairfax Financial Hldgs. Ltd. (FRFHF), 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 September 21, 2011 to October 19, 2011, the stock price had risen $2.19 (6.9%) from $31.87 to $34.06. 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 July 26, 2011 and August 8, 2011 when shares fell for 10-straight days, falling 12.6% (-$4.34) over that span. Shares are up $4.71 (+16%) year to date.

(Source: Xignite Financials)

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