Allstate Corporation’s ALL fourth-quarter 2018 earnings of $1.24 per share beat the Zacks Consensus Estimate by 22.8% but decreased 40.7% on a year-over-year basis.
The decrease was due to heavy catastrophe loss as well as a decline in revenues.
Revenues came in at $9.48 billion, outpacing the Zacks Consensus Estimate by 8.8%. The top line was down 5.8% year over year, due to a decline in net investment income.
In the quarter under review, total expenses increased 10.5% year over year to $9.84 billion on higher property and casualty insurance claims, and claims expense and operating costs.
The Allstate Corporation Price, Consensus and EPS Surprise
The Allstate Corporation Price, Consensus and EPS Surprise | The Allstate Corporation Quote
The company incurred catastrophe loss of $963 million, which was 60.8% higher year over year.
Total policies in force as of Dec 31, 2018 were 113.9 million, up 38.4% year over year.
Net investment income of $786 million declined 13.9% year over year due to lower fixed income and equity valuations.
Solid Segmental Performance
Property-Liability insurance total revenues of $8.3 billion declined 3.9% year over year due to lower investment income, partly offset by increase in premium and other revenues.
Service Businesses’ total revenues were $356 million, up 27% year over year. This upside was primarily driven by higher insurance premium, other revenues and net investment income.
Allstate Life’s total revenues of $495 million increased 2.1% year over year, driven by growth in premiums and other revenues.
Allstate Benefits’ total revenues remained almost unchanged at $292 million as the increase in premium and net investment income was almost offset by realized capital losses.
Allstate Annuities’ revenues of $63 million fell from $375 million in the year-ago quarter due to a decline in net investment income and high realized capital losses .
Share Buyback and Dividend
Allstate returned $614 million to its shareholders in common stock dividends and repurchased shares worth $2.2 billion in 2018.
Capital Position (As of Dec 31, 2018)
Total shareholders’ equity was $21.3 billion, down 5.5% year over year.
Total assets were $81.3 billion, up 1.9% year over year.
Long-term debt of $6.45 billion increased 1.6% year over year.
Ratio of debt-to-equity was 30.3%, up 210 basis points year over year.
Adjusted return on equity of 14.8% expanded 140 basis points year over year.
Zacks Rank and Performance of Other Insurers
Allstate carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among other players from the insurance industry that have reported fourth-quarter earnings so far, the bottom line of MGIC Investment Corporation MTG Chubb Limited CB and The Travelers Companies, Inc. TRV beat the respective Zacks Consensus Estimate.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
MGIC Investment Corporation (MTG) : Free Stock Analysis Report
The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report
Chubb Limited (CB) : Free Stock Analysis Report
The Allstate Corporation (ALL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research