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Amerisafe's (AMSF) Q3 Earnings Surpass on Lower Expenses

Zacks Equity Research
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Callon Petroleum (CPE) Beats on Q3 Earnings and Revenues

Callon Petroleum's (CPE) third quarter 2018 results benefit from higher oil-equivalent production and increased realized oil price.

Amerisafe Inc. AMSF delivered third-quarter 2018 operating earnings per share of $1.01, beating the Zacks Consensus Estimate by 34.7%. Moreover, the bottom line was up 16.1% year over year driven by a decline in total expenses and an impressive operational efficiency.

AMERISAFE, Inc. Price, Consensus and EPS Surprise

AMERISAFE, Inc. Price, Consensus and EPS Surprise | AMERISAFE, Inc. Quote

Quarter in Detail

Amerisafe’s total operating revenues inched up 0.8% from the prior-year quarter to $93 million but missed the Zacks Consensus Estimate by 1.1%.

Gross written premiums in the quarter dipped 2% year over year to $85 million, primarily due to lower payroll audits and related premium adjustments. Voluntary premiums for the quarter were flat when compared with the same time frame of 2017.

Net investment income increased 1.2% year over year to $7.9 million. This was mainly owing to increased higher investment yields on fixed-income securities.

Total expenses came in at $69.1 million, down 0.2% from the year-ago quarter on the back of lower loss and loss adjustments incurred.

Net combined ratio, a measure of profitability (lower the better), was 81.1% compared with 81.4% in the prior-year period.

Financial Update

Amerisafe exited the quarter with cash and cash equivalents of $33 million, down 40% from year-end 2017.

As of Sep 30, 2018, total shareholders’ equity was $458.9 million, up 7.9% from the level as of Dec 31, 2017.

Operating return on equity was 17.4%, up 380 bps year over year.

Book value per share as of Sep 30, 2018 was $23.82, up 7.8% from the figure on Dec 31, 2017.

Dividend

 On Oct 23, 2018, the board of directors announced a quarterly cash dividend of 22 cents per share payable Dec 28, 2018 to shareholders of record on Dec 14, 2018.

Additionally, the board members also cleared an extraordinary dividend of $3.50 per share payable Dec 28, 2018 to shareholders of record as of Dec 14, 2018.

Zacks Rank and Other Stocks to Consider

Amerisafe carries a Zacks Rank #2 (Buy). Some other stocks worth considering from the insurance industry with the right combination of elements to surpass estimates this time around are as follows:

Everest Re Group, Ltd. RE has an Earnings ESP of +7.29% and a Zacks Rank #3 (Hold). The company is set to announce third-quarter earnings on Oct 29. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

American Financial Group, Inc. AFG has an Earnings ESP of +2.46% and is a #3 Ranked player. The company is set to announce third-quarter earnings on Oct 30.  

Willis Towers Watson Public Limited Company WLTW has an Earnings ESP of +2.40% and a Zacks Rank of 3. The company is set to release third-quarter earnings on Nov 2.

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