Travelers Earnings: Here’s Why Shares are Surging

The Travelers Companies, Inc. (NYSE:TRV) generated a profit and beat Wall Street’s expectations, AND beat the revenue expectation. Both the profit and revenue beat are a positive sign to shareholders seeking high growth out of the company. Shares are up 3.54%.

Start 2013 better than ever by saving time and making money with your Limited Time Offer for our highly-acclaimed Stock Picker Newsletter. Click here for our fresh Feature Stock Pick now!

The Travelers Companies, Inc. Earnings Cheat Sheet

Results: Net income decreased 0% to $618 million (78 cents per diluted share) in the quarter versus a net gain of $618 million in the year-earlier quarter.

Revenue: Rose 1.68% to $6.48 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: The Travelers Companies, Inc. reported adjusted net income of 78 cents per share. By that measure, the company beat the mean analyst estimate of $0.14. It beat the average revenue estimate of $5.34 billion.

Quoting Management:

“We are very encouraged by pricing trends across all three business segments. Renewal rate change in Business Insurance was approximately 8%, up from nearly 6% in the fourth quarter of last year and consistent with recent quarters. Renewal rate change in Financial, Professional and International Insurance improved to 4%, and we once again achieved double-digit pricing improvements in Personal Insurance…

…Given the continued low interest rate environment and uncertain weather patterns, we will continue to seek improved pricing. In addition, we remain committed to returning excess capital to shareholders, and in that regard we are especially pleased that notwithstanding the high level of catastrophe losses we again experienced in 2012, we were able to return more than $2.1 billion to shareholders through dividends and share repurchases,” stated Jay Fishman, Chairman and Chief Executive Officer.

Key Stats:

Revenue decreased 0.49% from $6.51 billion in the previous quarter. Net income decreased 28.47% from $864 million 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 $1.85 and has not changed. For the current year, the average estimate has moved down from a profit of $7.14 to a profit of $5.66 over the last ninety days.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute – click here and get our CHEAT SHEET stock picks now.

(Company fundamentals provided by Xignite Financials.)