Chubb Corp Earnings: Net Income Keeps Falling

Wall St. Cheat Sheet

S&P 500 component Chubb Corporation reported its results for the fourth quarter. Chubb is a holding company that provides property and casualty insurance business to a wide range of customers.

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Chubb Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for the property and casualty insurance company fell to $452 million ($1.60 per share) vs. $620 million ($2.02 per share) a year earlier. This is a decline of 27.1% from the year earlier quarter.

Actual vs. Wall St. Expectations: CB reported adjusted net income of $1.63 per share. By that measure, the company beat the mean estimate of $1.60 per share.

Quoting Management: “Chubb had a solid fourth quarter with operating income per share of $1.63 and a combined ratio of 89.9%,” said John D. Finnegan, Chairman, President and Chief Executive Officer. “We were very pleased to record $1.7 billion in net income for the year despite unprecedented levels of catastrophe losses. This reflects the strong underlying performance of all three of our business units. “The fourth quarter was especially encouraging as the commercial rate environment continued to improve,” said Mr. Finnegan. “We secured an average renewal rate increase of 6% in our U.S. standard commercial business, and average renewal rates in our U.S. professional liability business turned positive for the first time in two years. Given our strong balance sheet and underwriting discipline, we are well positioned to take advantage of these improving market conditions.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 6 cents in the third quarter, by 26 cents in the second quarter, and by 22 cents in the first quarter.

The company has now seen net income fall in each of the last three quarters. In the third quarter, net income fell 47.9% from the year earlier, while the figure fell 19.1% in the second quarter.

Looking Forward: Expectations for the first quarter of the next fiscal year have not changed from $1.53. At $5.07 per share, the average estimate for the fiscal year has fallen from $5.13 ninety days ago.

Competitors to Watch: American Financial Group , The Travelers Companies, Inc. , CNA Financial Corporation , White Mountains Insurance Group, Ltd. , RLI Corp. , Loews Corporation , HCC Insurance Hldgs., Inc. , W.R. Berkley Corporation , OneBeacon Insurance Group, Ltd. , and Arch Capital Group Ltd. .

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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