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Progressive (PGR) Q1 Earnings Miss Estimates, Revenues Up Y/Y

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·3 min read
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The Progressive Corporation’s PGR first-quarter 2021 earnings per share of $1.72 missed the Zacks Consensus Estimate of $1.78. The bottom line also declined 10.4% year over year.

Behind the Headlines

Net premiums written were $11.7 billion in the quarter, up 19% from $9.9 billion a year ago. Net premiums earned grew 10% to nearly $10.4 billion.

Net realized gains on securities were $585.3 million, rebounded from year-ago loss of $553.6 million.

Combined ratio — percentage of premiums paid out as claims and expenses — deteriorated 240 basis points (bps) from the prior-year quarter to 89.3.

Operating revenues were $10.9 million, up 10% year over year. The improvement can be attributed to a 10.5% increase in premiums, 7.9% higher fees and other revenues, 4.7% higher service revenues. This was partially offset by 8.7% lower investment income.

Total expenses increased 13% year over year to $9.6 billion due to 16% higher losses and loss adjustment expenses, 5% higher other underwriting expenses, and 12% increase in policy acquisition costs.

In March, policies in force were impressive at the Personal Auto segment, having improved 13% from the year-ago month to 17.2 million. Special Lines climbed 10% to 5 million.

In Progressive’s Personal Auto segment, Direct Auto advanced 15% year over year to 9.3 million while Agency Auto improved 10% to 7.9 million.

Progressive’s Commercial Auto segment rose 13% year over year to 0.9 million. The Property business had about 2.6 million policies in force in March, up 13%.

The Progressive Corporation Price, Consensus and EPS Surprise

The Progressive Corporation Price, Consensus and EPS Surprise
The Progressive Corporation Price, Consensus and EPS Surprise

The Progressive Corporation price-consensus-eps-surprise-chart | The Progressive Corporation Quote

Financial Update

Progressive’s book value per share was $29.64 as of Mar 31, 2021, up 25.2% from $23.68 on Mar 31, 2020.

Return-on-equity in March 2021 was 38.4%, up 990 bps year over year. Debt-to-total capital ratio improved 410 bps to 23.2%.

Zacks Rank

Progressive currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Release

W.R. Berkley Corporation WRB set to report first-quarter 2021 results on Apr 20. The Zacks Consensus Estimate for the first quarter is pegged at 96 cents, indicating an improvement of 39.1% year over year.

RLI Corporation RLI set to report first-quarter 2021 results on Apr 21. The Zacks Consensus Estimate for the first quarter is pegged at 74 cents, suggesting growth of 12.1% year over year.

First American Financial Corporation FAF set to report first-quarter 2021 results on Apr 22. The Zacks Consensus Estimate for the first quarter is pegged at $1.14, suggesting an improvement of 7.6% year over year.

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