Tower Group Second Quarter Earnings Sneak Peek

Tower Group, Inc. (NASDAQ:TWGP) will unveil its latest earnings on Monday, August 8, 2011. Tower Group, Inc. through its subsidiaries offers property and casualty insurance products and insurance services and products.

Tower Group, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 66 cents per share, a rise of 15.8% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 72 cents. Between one and three months ago, the average estimate moved down, but it has been unchanged at 66 cents during the last month. For the year, analysts are projecting net income of $2.67 per share, a rise of 4.7% from last year.

Past Earnings Performance: The company has beaten estimates the last four quarters and is coming off a quarter where it topped forecasts by 3 cents, reporting profit of 49 cents per share against a mean estimate of net income of 46 cents per share.

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Wall St. Revenue Expectations: On average, analysts predict $376 million in revenue this quarter, a rise of 37.8% from the year ago quarter. Analysts are forecasting total revenue of $1.53 billion for the year, a rise of 18.6% from last year’s revenue of $1.29 billion.

Analyst Ratings: Analysts are bullish on Tower Group as three analysts rate it as a buy, none rate it as a sell and three rate it as a hold.

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past four quarters. Over that span, the company has averaged growth of 46%, with the biggest boost coming in the third quarter of the last fiscal year when revenue rose 65.3% from the year earlier quarter.

The company has now seen net income rise in three straight quarters. In the first quarter, net income rose 47% while it rose 25.3% in the fourth quarter of the last fiscal year and 12.4% in the third quarter of the last fiscal year.

Competitors to Watch: The Travelers Companies, Inc. (NYSE:TRV), W.R. Berkley Corporation (NYSE:WRB), The Progressive Corp. (NYSE:PGR), Markel Corporation (NYSE:MKL), American Financial Group (NYSE:AFG), RLI Corp. (NYSE:RLI), Harleysville Group Inc. (NASDAQ:HGIC), The Hanover Insurance Group, Inc. (NYSE:THG), and Selective Insurance Group (NASDAQ:SIGI).

Stock Price Performance: During July 5, 2011 to August 2, 2011, the stock price had dropped $1.49 (-6.3%) from $23.79 to $22.30. The stock price saw one of its best stretches over the last year between June 23, 2011 and July 1, 2011 when shares rose for seven-straight days, rising 3.4% (+79 cents) over that span. It saw one of its worst periods between July 22, 2011 and July 28, 2011 when shares fell for five-straight days, falling 6.2% (-$1.51) over that span. Shares are down $2.97 (-11.8%) year to date.

(Source: Xignite Financials)

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