Global Indemnity Q2 Earnings in Line with Estimates, Up Y/Y - Analyst Blog

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Global Indemnity Plc ( GBLI ) reported operating earnings per share (EPS) of 35 cents for second-quarter 2014. The results were in line with the Zacks Consensus Estimate and higher than the year-ago quarter figure of 27 cents.

With this result, the company's average four-quarter beat stands at 41.1%. Notably, shares fell 3.3% following the earnings announcement.

The company's operating net income surged 29.4% year over year to $8.8 million. Including extraordinary items, reported net income escalated to $33.2 million or $1.31 per share from $8.7 million or 34 cents a sharein the prior-year quarter.

Growth primarily stemmed from improved premiums in insurance operations and higher net realized investment gains. These were partially offset by lower investment income and higher-than-expected operating, underwriting and loss and loss adjusted expenses (LAE).

Behind the Headlines

Global Indemnity's total revenue soared 59% year over year to $113.7 million. The upside was led by a 12.4% rise in net earned premiums, bringing the figure to $66 million. Additionally, net realized investment gains surged to $39.9 million from $2.8 million in the year-ago quarter. However, net investment income declined 21.4% to $7.7 million, while other revenues fell to $0.16 million from $0.25 million in the year-ago quarter.

Meanwhile, acquisition and underwriting expenses rose 11%, operating expenses increased 28% and LAE increased 9.7%, all on a year-over-year basis. These were partly offset by a 73% decline in interest expenses.

Subsequently, the combined ratio improved modestly to 99.2% against 101.2% in the year-ago quarter, reflecting lower loss and expense ratios.

Financial Update

At the end of Jun 2014, Global Indemnity had cash and cash equivalents of $1.46 billion, down from $1.57 billion at 2013-end. Total assets climbed to $1.98 billion from $1.91 billion at 2013-end, whereas shareholder equity rose to $896.8 million from $873.3 million at the end of Dec 2013.

Additionally, book value per share was $35.43 at Jun 2014-end, up 2.3% from 2013-end.

Stocks to Consider

Along with Global Indemnity sports a Zacks Rank #1 (Strong Buy). Other stocks in the same sector that warrant a look include Mercury General Corp. ( MCY ), White Mountains Insurance Group Ltd. ( WTM ) and AmTrust Financial Services Inc. ( AFSI ). All of these have the same Zacks Rank as Global Indemnity.


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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: EPS , AFSI , MCY , GBLI , WTM

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