AXIS Capital Holdings Limited
) reported second-quarter 2013 net operating income of 43 cents
per share, which fell substantially short of the Zacks Consensus
Estimate of 59 cents. Earnings dropped 52% year over year. Net
operating income of $50 million plunged nearly 56% year over
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Top-line improvement was more than offset by increase in
expenses, inducing a year-over-year decline.
Including net realized investment gains of $14.6 million or 13
cents per share, foreign exchange gain of $10.9 million or 9
cents per share and loss on repurchase of preferred shares of
$3.1 million or 3 cents, AXIS Capital reported net income of $72
million or 62 cents per share. This compares unfavorably with a
profit of $168 million or $1.35 per share in the prior-year
Quarterly Operational Performance
Gross premiums written by AXIS Capital in the quarter increased
20.4% year over year to $1.22 billion, aided by a 29.2%
improvement in reinsurance segment and 15.7% in the insurance
Net premiums earned in the reported quarter were $945.9 million,
up 11.2% year over year.
Net investment income of AXIS Capital increased 11.6% year over
year to $83.1 million,
Total revenue of AXIS Capital grossed $1.04 billion in the
quarter, improving 9.4% from the year-ago quarter. The top line
comfortably surpassed the Zacks Consensus Estimate of $0.98
Total expenses in the quarter were $966.6 million, escalating
26.5% year over year, largely due to higher net losses and loss
expenses and acquisition costs.
Underwriting income of AXIS Capital slumped nearly 92% to $9.9
million in the quarter. The combined ratio deteriorated 940 basis
points to 101.7% in the quarter.
Pre-tax net cat losses, net of reinstatement premiums, were $140
million, stemming from tornadoes and hailstorms in the U.S. and
flooding in Canada, Europe and Argentina.
Quarterly Segment Update
: Gross premiums written in the quarter under review improved
15.7% year over year to $781.1 million, driven by better
performance at accident & health line of business and
property, professional lines and liability lines of business
Net premiums earned augmented 9.3% year over year to $422.3
million on the back of expansion in accident & health, and
Underwriting loss incurred was $55.5 million, compared with
income of $24.6 million in the year-ago quarter.
Combined ratio for the quarter deteriorated 1950 basis points to
: Gross premiums written in the quarter increased 29.2% year over
year to $438.6 million, largely driven by improved performance
across all lines of businesses.
Net premiums earned improved 12.8% in the quarter to $523.5
million, driven by an expansion in the agriculture line of
Underwriting income declined 31.3% year over year to $65.4
million in the quarter.
Combined ratio deteriorated 800 basis points to 87.5% in the
AXIS Capital exited 2012 with cash and cash equivalents of $1.1
billion, up 29% from 2012 end level.
Total capitalization as of Jun 30, 2013, was $6.6 billion,
including $1.0 billion of long-term debt and $0.6 billion of
Book value per share was $42.67 as of Jun 30, 2013, up 5% year
Return on equity was 3.9% in the reported quarter down from 8.7%
in the year-ago quarter.
Alliance Data's net cash flow from operations was $236 million,
down 18.1% year over year.
Share Repurchase and Dividend
In the reported quarter, AXIS Capital spent $228 million to
buyback 5.1 million shares. AXIS Capital is left with $409
million under its authorization.
Results at few other Property and Casualty
) reported second-quarter 2013 operating net income of $2.29 per
share, up 19.3% from the Zacks Consensus Estimate of $1.92.
Results improved 5.5% from $2.17 earned in the year-ago quarter.
Everest Re Group Ltd.
) reported second-quarter 2013 operating earnings of $5.10 per
share, substantially beating the Zacks Consensus Estimate of
$4.26 per share. Earnings were also up 20% year over year.
) reported second-quarter operating earnings of $1.77 per share,
significantly ahead of the Zacks Consensus Estimate of $1.38 per
share. Earnings also increased 29% year over year.
AXIS Capital currently carries a Zacks Rank #3 (Hold).