The Navigators Group Earnings Cheat Sheet: Profit Goes South

The Navigators Group, Inc. (NASDAQ:NAVG) reported its results for the second quarter. Navigators Group is an international insurance holding company focusing on specialty products within the overall property/casualty insurance market.

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The Navigators Group Earnings Cheat Sheet for the Second Quarter

Results: Net income for The Navigators Group, Inc. fell to $9.5 million (60 cents per share) vs. $19 million ($1.16 per share) a year earlier. This is a decline of 49.9% from the year earlier quarter.

Revenue: Rose 2.6% to $194.3 million from the year earlier quarter.

Actual vs. Wall St. Expectations: NAVG fell short of the mean analyst estimate of 70 cents per share. It beat the average revenue estimate of $167.7 million.

Quoting Management: Navigators’ Chief Executive Officer, Stan Galanski, commented: “Market conditions are very much in flux, with positive pricing trends evident on first-party and energy-related risks but continued competitive pressure on pricing for most casualty products. We encourage our underwriters to focus on profitability and to walk away from business when they can’t achieve their pricing and terms. Our double digit growth for the quarter came from three units targeted for growth in 2011: NavTech, Excess Casualty and Navigators Re. Conversely, we continue to take a cautious view of the U.S. D&O and primary casualty markets, for which excess capacity has led to ongoing soft market conditions.”

Key Stats:

The company has now fallen short of estimates in the last two quarters. In the first quarter, it missed expectations by 34 cents with net income of 43 cents versus a mean estimate of net income of 77 cents per share.

Revenue rose last quarter after seeing a drop the quarter before. Revenue fell 10.5% to $169.2 million in the first quarter from the year earlier.

Competitors to Watch: W.R. Berkley Corporation (NYSE:WRB), Allied World Assurance Co Hldgs., AG. (NYSE:AWH), RLI Corp. (NYSE:RLI), White Mountains Insurance Group, Ltd. (NYSE:WTM), The Travelers Companies, Inc. (NYSE:TRV), Markel Corporation (NYSE:MKL), Global Indemnity plc (NASDAQ:GBLI), Tower Group, Inc. (NASDAQ:TWGP), and CNA Financial Corporation (NYSE:CNA).

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(Source: Xignite Financials)