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Allstate (ALL) Beats Earnings and Revenue Estimates in Q3

Zacks Equity Research

Allstate Corporation’s ALL third-quarter 2019 earnings of $2.84 per share beat the Zacks Consensus Estimate by 12.7% and were up 47% year over year, led by revenue growth.

Revenues of $10.8 billion outpaced the Zacks Consensus Estimate by 19.9%. The top line was up 5.7% year over year, driven by an increase in premiums, investment income, life premiums and contract charges.

Total expenses increased 6.7% year over year to $9.9 billion on higher property and casualty insurance claims, life contract benefits, pension and other post-retirement costs.

The company incurred catastrophe loss of $510 million, down 18% year over year.

The Allstate Corporation Price, Consensus and EPS Surprise

The Allstate Corporation Price, Consensus and EPS Surprise

The Allstate Corporation price-consensus-eps-surprise-chart | The Allstate Corporation Quote

Total policies in force as of Sep 30, 2019 were 136.1 million, up 40.7% year over year.

Net investment income of $880 million increased 4.3% year over year.

Solid Segmental Performance

Property-Liability insurance premiums of $9.3 billion increased 5.8% year over year due to rise in premium in Auto, Homeowners as well as Commercial line insurance. The segment’s underwriting income of $737 million was up 45.4% year over year due to reduced operating expenses.

Service Business’ revenues were $418 million, up 27% year over year. This upside was primarily driven by higher contribution from the company’s Protection Plans, Dealer Services and Arity business.

Allstate Life, Benefits and Annuities total premium and contract charges were $625 million, up 2% year over year, driven by higher contribution from Life and Benefits business.

Capital Position (as of Sep 30, 2019)

Total shareholders’ equity was $26.1 billion, up 23% from year-end 2018 level.

Total assets were $121.1 billion, up 7.8% from 2018 year-end level.
The company’s financial leverage position improved with a 120 basis point reduction in debt-to-equity ratio to 20.2%.

Adjusted return on equity of 14.2% was down 270 basis point year over year.

Adjusted book value per share was $63.70, up 4.6% year over year.

Share Buyback and Dividend Buyback

The company returned $775 million to common shareholders in the third quarter of 2019 through a combination of $166 million in common stock dividends and $509 million of share repurchases.

Zacks Rank and Performance by Other Players

Allstate carries a Zacks Rank #1 (Strong Buy). Some other insurers that have recently reported earnings this season are W.R. Berkley Corp. WRB, The Progressive Corp. PGR and Chubb Ltd. CB, each beating their estimate by 26.5%, 6.8% and 2.3%, respectively.

You can see the complete list of today’s Zacks #1 Rank stocks here.

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