CNA Financial (CNA) to Report Q2 Earnings: What to Expect
CNA Financial Corporation CNA is scheduled to report second-quarter 2023 earnings on Jul 31, before market open. The insurer delivered an earnings surprise in two of the last four quarters while missing in the other two, the average beat being 9.91%.
Factors to Note
CNA Financial’s premiums are likely to have benefited from higher new business and retention across its Specialty, Commercial and International segments. The Zacks Consensus Estimate for earned premium is pegged at $2.3 billion, indicating an upside of 9.5% from the year-ago quarter’s reported figure. We expect earned premium to increase 9.8% to $2.4 billion.
Net investment income in the to-be-reported quarter is likely to have benefited from an increase in income from fixed-income securities and other investments, limited partnership, common stock investments, favorable reinvestment yields and strong operating cash flows. We expect investment income to be $409.4 million. The Zacks Consensus Estimate for investment income is pegged at $439 million, indicating a 1.6% increase from the year-ago reported figure.
The Zacks Consensus Estimate for second-quarter revenues is pegged at $2.8 billion, suggesting an increase of 8.1% from the prior-year quarter.
CNA is expected to have gained from better pricing and increased exposure, which are likely to have aided underwriting profitability. The Zacks Consensus Estimate for the combined ratio at Property Casualty is pegged at 95, indicating an improvement of 400 basis points from the year-ago reported quarter. We estimate the combined ratio to be 96.7.
Total benefits and expenses are likely to have increased mainly due to higher insurance claims and policyholders’ benefits, amortization of deferred acquisition costs, non-insurance warranty expense and other operating expenses. We expect total expenses to increase 3.4% to $2.8 billion.
The company expects a higher expense ratio in the second quarter due to the employee compensation market adjustments.
The Zacks Consensus Estimate for second-quarter earnings per share is pegged at $1.12, indicating a rise of 24.4% from the prior-year quarter.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for CNA Financial this time around. This is because the stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for an earnings beat. This is not the case, as you can see here.
Earnings ESP: CNA Financial has an Earnings ESP of -10.71%. This is because the Most Accurate Estimate of $1 is pegged lower than the Zacks Consensus Estimate of $1.12. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
CNA Financial Corporation Price and EPS Surprise
CNA Financial Corporation price-eps-surprise | CNA Financial Corporation Quote
Zacks Rank: CNA currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
Here are three insurance stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Assurant, Inc. AIZ has an Earnings ESP of +0.52% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $2.60, indicating a year-over-year decline of 11.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
AIZ’s earnings beat estimates in three of the last four quarters and missed in the other one.
American Equity Investment Life Holding Company AEL has an Earnings ESP of +7.85% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $1.67, indicating a year-over-year increase of 70.4%.
AEL’s earnings beat estimates in three of the last four quarters and missed in the other one.
Brighthouse Financial, Inc. BHF has an Earnings ESP of +0.42% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $3.55, indicating a year-over-year increase of 7.9%.
BHF’s earnings beat estimates in two of the last four quarters and missed in the other two.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Assurant, Inc. (AIZ) : Free Stock Analysis Report
CNA Financial Corporation (CNA) : Free Stock Analysis Report
American Equity Investment Life Holding Company (AEL) : Free Stock Analysis Report
Brighthouse Financial, Inc. (BHF) : Free Stock Analysis Report
