State Auto Financial Earnings: Here’s Why Shares are Up Now

State Auto Financial Corp. (NASDAQ:STFC) 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. Shares are up 3.45%.

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State Auto Financial Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 83.48% to $0.38 in the quarter versus EPS of $2.30 in the year-earlier quarter.

Revenue: Decreased 26.03% to $296.7 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: State Auto Financial Corp. reported adjusted EPS income of $0.38 per share. By that measure, the company beat the mean analyst estimate of $0.13. It beat the average revenue estimate of $274.73 million.

Quoting Management:STFC President, Chairman and CEO Bob Restrepo commented on the quarter as follows: “State Auto Financial Corporation finished 2012 with positive net income for the quarter and year. Fundamentals in our core business are improving led by better ex-catastrophe loss ratios. As the final RED programs terminate, we made a decision to add an additional $7.2 million to our reserves in the fourth quarter for prior accident years, primarily relating to a sizeable restaurant program. Our view of the trucking program has not materially changed since the end of the third quarter.”

Key Stats (on next page)…

Revenue increased 3.6% from $286.4 million in the previous quarter. EPS increased to $0.38 in the quarter versus EPS of $-0.25 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.27 and has not changed. For the current year, the average estimate is a loss of $0.46, which is the same with that ninety days ago.

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