Atlas Financial Lags on Earnings, Beats Revs - Analyst Blog

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Atlas Financial Holdings Inc. ( AFH ) reported third-quarter 2013 operating net income of 18 cents per share, missing the Zacks Consensus Estimate by a penny. However, the results surged 80% year over year.

The upside in the bottom line was driven by substantial improvement in net premiums earned.

Including the effect of the repurchase discount of the preferred shares of 21 cents per share, Atlas Financial reported third quarter net income of 39 cents per share exceeding significantly the prior year quarter results of 17 cents per share.

Behind the Headline

Total revenues of Atlas Financial surged 50.7% year over year to $18.6 million, also exceeding the Zacks Consensus Estimate of $18 million. The top-line growth was a result of significant improvement in net premiums earned.

Riding on an increase of 40.2% in the commercial automobile premium and 89.7% surge in core lines premium, total gross premium written for Atlas Financial improved 37.3% from the prior-year quarter. Net earned premiums were nearly $18 million, rising 64.4% from $10.9 million in the year-ago quarter.

Net investment income of Atlas Financial declined 7% year over year to $0.6 million in the reported quarter.

Total expenses of Atlas Financial escalated 58.2% year over year to $16.9 million. The increase was attributable to higher net claims, increased acquisition costs as well as higher other underwriting expenses.

Underwriting results of Atlas Financial improved significantly during the quarter to $1.1 million from $0.83 million in the year-ago quarter.

Combined ratio improved 370 basis points year over year to 93.9%.

Financial Details

Atlas Financial exited the quarter with $8.7 million in cash and cash equivalents, down from $19.9 million at 2012-end.

Total assets increased 37.3% from the 2012-end level to $223.9 million as of Sep 30, 2013.

Claim liabilities of Atlas Financial totaled $104 million at the end of the quarter under review, up 48.5% from the 2012-end figure.

Total shareholders' equity of Atlas Financial stood at $55.6 million as of Sep 30, 2013, declining 7.2% from the 2012-end level.

Performances of Other Property and Casualty Insurers

Allied World Assurance Company Holdings, AG ( AWH ) reported its third-quarter 2013 operating net income of $2.93 per share, surpassing the Zacks Consensus Estimate by 37.5% and the prior-year quarter figure by 35.6%.

Aspen Insurance Holdings Ltd. ( AHL ) reported third-quarter 2013 operating net income of $1.05 per share, which substantially surpassed the Zacks Consensus Estimate of 80 cents by 31.2%. However, the results lagged the year-ago quarter number by 21.6%.

ACE Limited ( ACE ) reported third-quarter 2013 operating net income of $2.49 per share, beating the Zacks Consensus Estimate by 12.7%. Results also improved 23.9% from the year-ago quarter.

Zacks Rank

Atlas Financial presently carries a Zacks Rank #2 (Buy).



ACE LIMITED (ACE): Free Stock Analysis Report

ATLAS FINL HLDG (AFH): Free Stock Analysis Report

ASPEN INS HLDGS (AHL): Free Stock Analysis Report

ALLIED WORLD AS (AWH): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: ACE , AFH , AHL , AWH

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