The Travelers Companies, Inc. Earnings Cheat Sheet: Profit Streak Snapped by a Loss

S&P 500 (NYSE:SPY) component The Travelers Companies, Inc. (AMEX:TRV) reported its results for the second quarter. The Travelers Companies, Inc. is a holding company that is engaged in providing commercial and personal property and casualty insurance products and services to businesses, government units, associations and individuals.

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The Travelers Companies Earnings Cheat Sheet for the Second Quarter

Results: Swung to a loss of $364 million (88 cents per diluted share) in the quarter. The property and casualty insurance company had net income of $670 million or $1.35 per share in the year earlier quarter.

Revenue: Rose 3.4% to $6.39 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: TRV fell short of the mean analyst estimate of a loss of 62 cents per share. It beat the average revenue estimate of $5.81 billion.

Quoting Management: “Our second quarter loss was due to the extraordinary tornadoes and hail storms that caused devastation across significant portions of the United States,” commented Jay Fishman, Chairman and Chief Executive Officer. “To put this in perspective, these losses for us were larger than those we incurred from Hurricane Katrina in 2005 and the equivalent of losses we would expect from a one-in-100 year hurricane. The human impact of these storms was extraordinary, including significant loss of life. Our thoughts are very much with those who have been affected personally. We were pleased that, notwithstanding the highly unusual frequency and severity of these events, the company’s capital remained generally unchanged, reflecting our underlying earnings strength and thoughtful capital management strategy. We also appreciate the responsibility these events have placed on our entire claim organization and are proud of the speed and dedication with which they are responding.”

Key Stats:

The company fell short of forecasts after beating estimates in the previous two quarters. In the first quarter, it topped the mark by 35 cents, and in the fourth quarter of the last fiscal year, it was ahead by 23 cents.

TRV’s loss in the latest quarter follows profits in the previous three quarters. The company reported a profit of $839 million in the first quarter, a profit of $894 million in the fourth quarter of the last fiscal year and $1 billion in the third of the last fiscal year.

The company’s revenue has now risen for two straight quarters. In the first quarter, revenue increased 2.6% to $6.28 billion from the year earlier quarter.

Competitors to Watch: American Financial Group (NYSE:AFG), White Mountains Insurance Group, Ltd. (NYSE:WTM), RLI Corp. (NYSE:RLI), The Chubb Corporation (NYSE:CB), W.R. Berkley Corporation (NYSE:WRB), CNA Financial Corporation (NYSE:CNA), XL Group plc (NYSE:XL), American Insurance Group (NYSE:AIG), HCC Insurance Hldgs., Inc. (NYSE:HCC), and Markel Corporation (NYSE:MKL).

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(Source: Xignite Financials)

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