The Travelers Companies Earnings: Here’s Why the Stock is Up Now

The Travelers Companies, Inc. (NYSE:TRV) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 2.86%.

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The Travelers Companies, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 15.92% to $2.33 in the quarter versus EPS of $2.01 in the year-earlier quarter.

Revenue: Decreased 12.44% to $5.6 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: The Travelers Companies, Inc. reported adjusted EPS income of $2.33 per share. By that measure, the company beat the mean analyst estimate of $2.02. It missed the average revenue estimate of $5.61 billion.

Quoting Management: “We are pleased to report our highest quarterly operating income per diluted share since Travelers’ initial public offering in 2002,” commented Jay Fishman, Chairman and Chief Executive Officer. “Operating income of $887 million and operating return on equity of 15.8% reflect continued improvement in our underlying underwriting margins primarily due to the pricing and underwriting actions we have taken across all segments. Our high quality investment portfolio continued to perform well, with returns modestly declining in line with our expectations given continued low interest rates.”

Key Stats (on next page)…

Revenue decreased 13.59% from $6.48 billion in the previous quarter. EPS increased 223.61% from $0.72 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 $1.65 to a profit $1.67. For the current year, the average estimate has moved up from a profit of $7.06 to a profit of $7.25 over the last ninety days.

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