Erie Indemnity Company
) reported second-quarter 2014 net income of 94 cents per share, in
line with Zacks Consensus Estimate. Results improved year over year
by 12%, driven by increased revenues from management operations and
a low rise in expense.
Erie Indemnity Company - Earnings Surprise |
The improved performance was also reflected in the share price
that gained 1.19% to close at $74.09 in the last trading
Total revenue of Erie Indemnity was $1.6 billion, significantly
outperforming the Zacks Consensus Estimate of $373 million. Results
improved year over year by 12.1%, largely driven by a rise in the
premiums earned (up 8.6% year over year) and net investment income
(up 6.7% year over year).
The company's total benefits and expenses increased 25% year over
year to $1.4 billion, led by increase in insurance losses and loss
expenses as well as policy acquisition and underwriting expenses.
of Erie Indemnity reported revenue of $374 million, up 8.7% year
over year. Direct written premium of the property and casualty
group (on which the management fee is calculated) improved 8%.
Premium per policy increased 4.2% year over year. Erie Indemnity's
solid policy holder retention and the increase in new policies
resulted in policy growth of 4.5%.
Commissions rose 10% on higher direct written premium of the
property and casualty insurance operations.
Non-commission expenses increased 2.8% to $3 million year over
Pre-tax income from
declined 12.5% to $7 million year over year due to low equity and
earnings of limited partnerships in the reported quarter. Net
investment income increased $1 million year over year.
Erie Indemnity Company exited the quarter with cash and cash
equivalents of $300 million, down 34% from Dec 31, 2013.
Total assets increased 4.7% to $17.4 billion from 2013 end level as
of Jun 30, 2014.
Shareholder's equity rose 2.9% to $755 million from 2013 end level
as of Jun 30, 2014.
Dividend and Share Repurchase Update
The board of directors of Erie Indemnity approved a quarterly cash
dividend of 63.5 cents per Class A common stock, payable on Oct 17,
2014 to shareholders of record as of Oct 2, 2014. This
dividend rate represents a 7.2 % increase from the quarterly
dividend rate paid in 2013.
The company spent $8.2 million to repurchase 0.1 million shares in
the quarter. Notably, from the beginning of the year through Jul
18, Erie Indemnity bought back 0.3 million shares for $19.2
million. It had shares worth $18 million remaining as on Jul 18.
Currently, Erie Indemnity Company has a Zacks Rank #3 (Hold).
Performance of Other Insurance Brokers
Validus Holdings, Ltd. (
) reported second-quarter 2014 net operating income of $1.39 per
share, which missed the Zacks Consensus Estimate by 4.1% but
improved 35% year over year.
Brown & Brown Inc. (
) posted an operating net income of 38 cents per share for
second-quarter 2014, falling short of the Zacks Consensus Estimate
by 7.3%. However, the figure marked a year-over-year increase of
8.6% based on higher revenues.
Aon plc's (
) second-quarter 2014 operating earnings of $1.25 per share
exceeded the Zacks Consensus Estimate of $1.20 and rose 13% year
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