Everest Re Posts Robust Q4 Earnings - Analyst Blog

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Everest RE Group Ltd. ( RE ) reported record fourth-quarter 2013 operating earnings of $6.28 per share, significantly surpassing the Zacks Consensus Estimate of $5.00 per share by 25.6%. Earnings also reflected a phenomenal rise from the prior-year quarter number of 80 cents per share.

Including net realized capital gains of $1.27 per share, the company reported net income of $7.54 per share, surging from $1.13 reported in the year-ago quarter.

The bottom-line upside was fueled by the company's successful strategies to capture the market with its enriched product portfolio that is witnessing growing demand.

Operational Update

Everest RE's total revenue of $1.52 billion during the quarter exceeded the Zacks Consensus Estimate by 8.8%. It also surpassed the year-ago quarter results by 19.2%. Top-line growth was driven by higher earned premiums as well as significantly higher other net realized capital gains, partially offset by lower net investment income.

Gross written premiums were $1.3 billion, an increase of 14% year over year driven by higher premiums written at reinsurance as well as insurance segment.

Everest RE's net investment income including limited partnership income came in at $126.1 million in the quarter, down 13.8% year over year.

Total claims and expenses slid 13.7% year over year to $1.06 billion. The decline was attributable to lower incurred losses and loss adjustment expenses and lower interest, fees and bond-issue cost amortization expense.

Top-line growth coupled with expense reduction led to a substantial margin expansion for Everest Re. Operating margin during the fourth quarter was 20%, increasing 1670 basis points (bps) from the year-ago quarter figure.

The combined ratio improved 2690 bps year over year to 81.5% during the quarter.

Full-year 2013 Highlights

Everest Re posted record full-year 2013 net operating income of $21.47 per share which surged 57.6% from the 2012 number.

Including net realized capital gains of $3.98 per share, Everest Re reported net income of $25.44 per share for 2013, which soared 61.1% year over year.

Total revenues of Everest Re amounted to $5.064 billion for the full year, up 14.6% from the 2012 number.

Financial Update

Everest Re exited the quarter with total assets of $19.8 billion, up 0.2% from 2012-end.

Total cash balance as of the end of 2013 was $611.4 million, increasing 13.8% from the Dec 31, 2012-level.

Everest Re's cash flow from operations was approximately $1.10 billion during 2013, up 58.1% from the year-ago quarter results.

Everest Re's Shareholders' equity as of the end of the reported quarter was $6.97 billion, 3.5% more than the 2012-end level.

Return on Equity was 20% during 2013.

Share Repurchase Update

During the fourth quarter, the company bought back 0.47 million shares for $72 million taking full year tally to 4.7 million shares bought back for $621.9 million. Additionally, in Jan 2014, the company repurchased $28 million worth of its shares. The company is left with 4.4 million shares available for repurchase.

Performances by other Property and Casualty Insurers

Among the others, ACE Limited ( ACE ) reported operating net earnings of $2.39 per share in the fourth quarter of 2013, surpassing the Zacks Consensus Estimate by 19.5%. Moreover, earnings surged nearly 67% on a year-over-year basis.

American Financial Group Inc. ( AFG ) reported fourth-quarter operating earnings per share of $1.28, which comfortably beat the Zacks Consensus Estimate of $1.23. On a year-over-year basis, earnings surged 91%.

The Travelers Companies Inc. ( TRV ) reported operating net earnings of $2.68 per share in the fourth quarter of 2013, surpassing the Zacks Consensus Estimate by 23.5%. Moreover, earnings improved nearly fourfold on a year-over-year basis.

Zacks Rank

Everest Re presently carries a Zacks Rank #4 (Sell).



ACE LIMITED (ACE): Free Stock Analysis Report

AMER FINL GROUP (AFG): Free Stock Analysis Report

EVEREST RE LTD (RE): Free Stock Analysis Report

TRAVELERS COS (TRV): 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 , AFG , RE , TRV

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