AmTrust Financial Services Inc.
) reported operating earnings per share of 86 centsfor the second
quarter of 2013. The results were significantly better thanthe
Zacks Consensus Estimate of 76 cents and the year-ago figure of
64 cents. Consequently, operating net income surged 33% year over
year to $60.4 million.
Excluding extraordinary items, reported net income escalated
to $80.1 million or $1.14 per share as compared with $40.4
million or 59 cents a sharein the year-ago quarter. Growth was
primarily driven by significant improvement in top line and
agency acquisitions implemented in the past one year. The
positives were partially offset by higher-than-expected
AmTrust's total revenue jumped 66.4% to $716.5 million from
$430.6 billion in the year-ago quarter. It substantially topped
the Zacks Consensus Estimate of $476 million as well. The upside
was attributable to net earned premiums that increased 60.6% year
over year to $536.5 million. Additionally, commission and other
revenues escalated 86.3% to $180 million, owing to higher ceding
commission, investment income as well as service and fee
However, total expenses spiked 70.6% year over year to $637.6
million. The upsurge was led by higher loss and loss adjusted
expenses (LAE) along with raised acquisition, underwriting and
other expenses. Consequently, combined ratio deteriorated to
91.3% against 88.9% in the year-ago quarter.
At the end of Jun 2013, AmTrust held cash and equivalents of
$3.5 billion, up from $2.7 billion at 2012-end. Total assets
surged to $9.08 billion from $7.42 billion at 2012-end, whereas
shareholder equity rose to $1.32 billion from $1.14 billion at
the end of Dec 2012.
Additionally, book value per share grew 4.4% from 2012-end to
$17.78 during the reported quarter. Annualized operating return
on equity (ROE) also improved to 19.2% from 18.5% in the year-ago
Concurrently, the board announced a quarterly cash dividend of
14 cents per share, payable on Oct 15, 2013, to shareholders of
record as on Oct 1, 2013.
Furthermore, AmTrust approved a stock dividend of 10%, which
equates to 10 cents per share. The stock dividend will be paid on
Sep 4, 2013 to shareholders of record as on Aug 20, 2013.
AmTrust carries a Zacks Rank #3 (Hold). Other strong
performers in the insurance sector include
Hilltop Holdings Inc.
Everest Re Ltd.
), all of which carry a Zacks Rank #2 (Buy).
AMTRUST FIN SVC (AFSI): Free Stock Analysis
CHUBB CORP (CB): Free Stock Analysis Report
HILLTOP HLDGS (HTH): Free Stock Analysis
EVEREST RE LTD (RE): Free Stock Analysis
To read this article on Zacks.com click here.