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Allstate (ALL) Beats on Q2 Earnings and Revenues, Up Y/Y

Zacks Equity Research

Allstate Corporation’s ALL second-quarter 2019 earnings of $2.18 per share beat the Zacks Consensus Estimate by 47.3% and were up 15% year over year, led by premium growth, partly offset by catastrophe losses.

Revenues of $10.8 billion outpaced the Zacks Consensus Estimate by 18.9%. The top line was up 7% year over year, driven by an increase in investment income (up 14.3% year over year).

Total expenses increased 7.5% year over year to $10 billion on higher property and casualty insurance claims, life contract benefits, pension and other post retirement costs.

The company incurred catastrophe loss of $1.07 billion, up 18% year over year.

Total policies in force as of Jun 30, 2019 were 129.8 million, up 46.8% year over year.

Net investment income of $942 million increased 14.3% 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

Solid Segmental Performance

Property-Liability insurance premiums of $9 billion increased 5.9% year over year due to rise in premium in Auto, Homeowners as well as Commercial line insurance. The segment’s underwriting income suffered from $1.1 billion, up 18% year over year due to catastrophe losses incurred in the reported quarter.

Service Business’ premiums were $350 million, up 18% year over year. This upside was primarily driven by higher contribution from the company’s Square Trade and Dealer Services business, up 33% and 16.5%, respectively.

Allstate Life’s premiums were $157 million, up 5.3% year over year, driven by higher contribution from traditional life insurance products. Allstate Benefits’ premiums remained almost unchanged at $256 million.

Capital Position (as of Jun 30, 2019)

Total shareholders’ equity was $24.5 billion, up 15% year over year.

Total assets were $118.4 billion, up 5.5% from 2018 year-end level.

The company’s financial leverage position improved with a 150 basis point reduction in debt-to-equity ratio to 27.9%.

Adjusted return on equity of 17% was up 80 basis point year over year.

Share Buyback and Dividend Buyback

The company returned $664 million to common shareholders in the second quarter of 2019 through a combination of $166 million in common stock dividends and $498 million of share repurchases, which in the settlement of the accelerated share purchase program.

Zacks Rank and Performance by Other Players

Allstate carries a Zacks Rank #3 (Hold). 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 28.13%,16.08% and 0.8%, respectively.

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

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