Progressive (PGR) Q2 Earnings Lag Estimates, Premiums Rise Y/Y
The Progressive Corporation’s PGR second-quarter 2023 earnings per share of 50 cents missed the Zacks Consensus Estimate of 88 cents. The bottom line declined 47.4% year over year.
Shares lost 5.6% in the pre-market trading session, reflecting the earnings underperformance.
The Progressive Corporation Price, Consensus and EPS Surprise
The Progressive Corporation price-consensus-eps-surprise-chart | The Progressive Corporation Quote
Behind the Headlines
Net premiums written were $14.7 billion in the quarter, rising 18% from $13.2 billion a year ago and beating our estimate of $13.5 billion.
Net premiums earned grew 19% to $14.5 billion and beat our estimate of $12.9 billion as well as the Zacks Consensus Estimate of 14.3 billion.
Net realized gains on securities were $126.9 billion against a loss of $1.1 billion in the year-ago quarter.
The combined ratio — the percentage of premiums paid out as claims and expenses — deteriorated 480 basis points (bps) from the prior-year quarter’s level to 104.
June Policies in Force
Operating revenues were about $4.8 billion, up 20.3% year over year. This improvement was driven by a 19.8% increase in premiums, 26.3% higher fees and other revenues, a 7.1% increase in service revenues and 38.6% higher investment income.
Total expenses increased 24.7% year over year to $4.9 billion due to 38.9% higher losses and loss adjustment expenses and 35.3% higher policy acquisition costs.
Policies in force were solid in the Personal Auto segment, increasing 17% from the year-ago month’s figure to 19.7 million. Special Lines improved 7% to 5.8 million.
In Progressive’s Personal Auto segment, Direct Auto increased 17% year over year to 11.2 million, while Agency Auto increased 11% to 8.4 million.
Progressive’s Commercial Auto segment rose 7% year over year to 1.1 million. The Property business had 2.8 million policies in force, up 5%.
Financial Update
Progressive’s book value per share was $27.71 as of Jun 30, 2023, down 4.4% from $29.00 on Jun 30, 2022.
Return on equity in June 2023 was 8%, down 1870 basis points (bps) year over year. The total debt-to-total capital ratio deteriorated 328 bps to 29.2.
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 Releases
Arch Capital Group ACGL will report second-quarter 2023 results on Jul 26. The Zacks Consensus Estimate for the second quarter is pegged at $1.65, suggesting an increase of 23.1% from the year-ago quarter’s reported figure.
ACGL’s earnings beat estimates in the last four quarters.
Kinsale Capital Group KNSL will report second-quarter 2023 results on Jul 27. The Zacks Consensus Estimate for the second quarter is pegged at $2.55, suggesting an increase of 32.8% from the year-ago quarter’s reported figure.
KNSL’s earnings beat estimates in the last four quarters.
RLI Corporation RLI will report second-quarter 2023 results on Jul 24. The Zacks Consensus Estimate for the second quarter is pegged at $1.20, suggesting a decrease of 19.5% from the year-ago quarter’s reported figure.
RLI’s earnings beat estimates in the last four quarters.
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