EMCI's Q3 Earnings In Line, Guides Up - Analyst Blog


EMC Insurance Group Inc. 's ( EMCI ) third-quarter 2013 operating earnings per share of 50 cents was at par with the Zacks Consensus Estimate but lagged the prior-year quarter's earnings of 65 cents. Consequently, operating net income plunged 22.6% year over year to $6.5 million.

Including extraordinary items, reported income stood at $7.2 million or 55 cents per share, down from $8.3 million or 65 cents a share. Realized investment gains escalated 150% to $719.5 million.

Total revenues amounted to $143.1 million, up 7.8% from $132.7 million in the prior-year quarter. The uptick was driven by earned premiums that rose 9% year over year to $132.4 million. However, net investment income dipped 3.6% to $10.5 million.

Meanwhile, loss and settlement expenses scaled up 11.2% year over year to $88.2 million. Additionally, underwriting expenses rose 9.5% to $17.3 million. As a result, total expenses increased 10.4% year over year to $134.5 million. Even combined ratio deteriorated to 100.8% from 99.3% in the year-ago quarter, primarily due to higher expense ratios.

Financial Update

As on Sep 30, 2013, EMC Insurance's total investment portfolio improved to $1.22 billion versus $1.19 billion at 2012-end. Moreover, total cash stood at $600.9 million compared with $330.4 million at the end of 2012. Total shareholder equity stood at $408.0 million at the end of Sep 2013, up from $401.2 million at the end of 2012.

EMC Insurance exited the reported quarter with book value per share of $31.03, up 1.9% from $30.46 at the end of Sep 2013. Excluding accumulated other comprehensive income, book value increased 5.3% to $28.83 per share from 2012-end.


Management revised its 2013 operating earnings guidance upward to $2.60−2.85 per share from the prior range of $2.40−2.65 per share. GAAP combined ratio is projected at around 98.4%, while investment income is estimated to decline by mid-single-digit in 2013.


Along with EMC Insurance, other strong performers in the insurance sector include Amerisafe Inc. ( AMSF ), Hilltop Holdings Inc. ( HTH ) and Navigators Group Inc. ( NAVG ). All the four stocks carry a Zacks Rank #2 (Buy).

AMERISAFE INC (AMSF): Free Stock Analysis Report

EMC INSURANCE (EMCI): Free Stock Analysis Report

HILLTOP HLDGS (HTH): Free Stock Analysis Report

NAVIGATORS GRP (NAVG): 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: AMSF , EMCI , HTH , NAVG



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