W.R. Berkley Corp Earnings: Revenue Falls After Four Straight Increases, Net Income Drops

Wall St. Cheat Sheet

W.R. Berkley Corporation reported its results for the fourth quarter. W.R. Berkley is an insurance holding company in the United States, which operates in five business segments: specialty insurance, regional property casualty insurance, alternative markets, reinsurance and international.

Investing Insights: Will the iPad 3 Be the Next Catalyst for Apple’s Stock?

W.R. Berkley Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for the property and casualty insurance company fell to $117.9 million (82 cents per share) vs. $126.9 million (85 cents per share) a year earlier. This is a decline of 7% from the year earlier quarter.

Revenue: Fell 11.4% to $1.09 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: WRB reported adjusted net income of 58 cents per share. By that measure, the company beat the mean estimate of 48 cents per share. It fell short of the average revenue estimate of $1.21 billion.

Quoting Management: William R. Berkley, chairman and chief executive officer, said: “We are pleased with our results for the quarter, but more importantly, with how we have positioned our company for the period ahead. Premiums written for our core business are beginning to grow again, and the newer units are growing at an increasing pace. Average renewal rates were up 4.2% during the quarter with the upward pricing trend accelerating. Our operating units’ priority is to remain focused on price.”

Key Stats:

A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the second quarter, which saw revenue rise 9.3%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 5 cents in the third quarter, by 3 cents in the second quarter, and by 2 cents in the first quarter.

Net income has dropped 11.3% year over year on average across the last five quarters. Performance was hurt by a 24.6% decline in the second quarter from the year earlier quarter.

Looking Forward: The average estimate for the first quarter of the next fiscal year remains unchanged at 63 cents a share. For the fiscal year, the average estimate has moved down from $2.10 a share to $2.04 over the last ninety days.

Competitors to Watch: White Mountains Insurance Group, Ltd. , American Financial Group , The Travelers Companies, Inc. , First Mercury Financial Corp. , Global Indemnity plc , OneBeacon Insurance Group, Ltd. , Markel Corporation , Arch Capital Group Ltd. , and CNA Financial Corporation .

Stock Performance: Shares of WRB were down 0.8% from the previous close.

Investing Insights: Will the iPad 3 Be the Next Catalyst for Apple’s Stock?

(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

View Comments