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AXIS Capital (AXS) Q3 Earnings Miss Estimates, Down Y/Y

Zacks Equity Research

AXIS Capital Holdings Limited AXS reported third-quarter 2019 operating loss of 39 cents against the Zacks Consensus Estimate of a breakeven. In the year-ago quarter, the company delivered earnings of 96 cents per share.

The company witnessed substantial underwriting loss across all business lines.

Axis Capital Holdings Limited Price, Consensus and EPS Surprise'

 

Axis Capital Holdings Limited Price, Consensus and EPS Surprise

Axis Capital Holdings Limited price-consensus-eps-surprise-chart | Axis Capital Holdings Limited Quote

 

Operational Update

Operating revenues amounted to nearly $1.28 billion, which declined 5.3% year over year.

Gross premiums written declined 1% year over year to about $1.4 billion. The downside was primarily caused by 8% fall in the insurance segment, partially offset by 13% rise in the reinsurance segment. The metric inched up 1% on a constant-currency basis.

Net investment income increased 1.2% year over year to nearly $115.8 million.

Total expenses in the quarter under review declined 2.9% year over year to $1.24 billion, courtesy of reduced transaction and reorganization expenses, amortization of value of business acquired and foreign exchange gains.

Combined ratio deteriorated 1150 basis points (bps) to 109.4%.

Segmental Results

Insurance: Gross premiums written fell 7.7% year over year to $894.9 million due to the repositioning of the portfolio. It was partially offset by increase in liability lines driven by new business and favorable rate changes. Net premiums earned declined 12.7% year over year to $536.4 million

Underwriting loss of $17.9 million widened 52.8% year over year. Combined ratio deteriorated 130 bps to 103.5%.

Reinsurance: Gross premiums written increased 12.6% year over year to $511.6 million primarily owing to timing differences. Additionally, the increase in catastrophe lines was caused by new business. The uptick was partially offset by decline in property lines associated with the repositioning of the portfolio. Net premiums earned increased 1.9% year over year to $620.8 million.

The segment sustained underwriting loss of $60.8 million against an underwriting gain of $70.7 million in the year-ago quarter. Combined ratio deteriorated 2040 bps year over year to 109.9%.

Financial Standing

AXIS Capital exited the third quarter with cash and cash equivalents of $763.8 million, down 38% from 2018-end level.

Senior notes totaled $1.4 billion, up 3.4% from 2018 end.

Book value per share increased 0.5% year over year to $56.26 as of Sep 30, 2019.

Dividend Update
The company announced dividend payout of 40 cents per share in the reported quarter. In the past year, total dividend declared was $1.60 per share.

Zacks Rank

AXIS Capital currently carries a Zacks Rank #5 (Strong Sell).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Insurance Releases

Of the insurance industry players that have reported third-quarter results so far, Global Life GL, Arthur J. Gallagher AJG and CNA Financial Corporation CNA beat their respective Zacks Consensus Estimate for earnings.

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