Markel Earnings: Here’s Why Investors are Ambivalent Now

Markel Corp. (NYSE:MKL) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company.

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Markel Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 85.55% to $9.5 in the quarter versus EPS of $5.12 in the year-earlier quarter.

Revenue: Rose 11.83% to $819.86 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Markel Corp. reported adjusted EPS income of $9.5 per share. By that measure, the company beat the mean analyst estimate of $5.37. It beat the average revenue estimate of $791.5 million.

Quoting Management: Alan I. Kirshner, Chairman and Chief Executive Officer, commented, “We are off to an excellent start in 2013. Strong underwriting results for the quarter reflect our long-term focus on underwriting discipline. Premium volume has benefited from both acquisitions and organic growth. Our 2012 acquisition of Thomco and the addition of the Hagerty business in 2013 contributed to a 15% increase in gross premium volume for the quarter. The enthusiasm about our acquisition of Alterra Capital Holdings Limited (NASDAQ: ALTE; BSX: ALTE.BH) continues to build in anticipation of bringing together two strong organizations. This acquisition, which is scheduled to close tomorrow, will create a powerful combination and truly expand our global footprint in the insurance and reinsurance market, while the application of Markel’s investment expertise will drive higher returns on the combined investment portfolio.”

Key Stats (on next page)…

Revenue increased 1.47% from $807.96 million in the previous quarter. EPS increased 67.84% from $5.66 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $4.84 to a profit $6.28. For the current year, the average estimate has moved up from a profit of $20.62 to a profit of $20.78 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)