Infinity Property and Casualty Earnings Miss Ests, Up Y/Y - Analyst Blog


Infinity Property and Casualty Corp. ( IPCC ) reported fourth-quarter 2013 operating earnings of 70 cents a share, missing the Zacks Consensus Estimate of 75 cents by 6.7%. However, the number escalated substantially from 31 cents of net operating loss reported in the year-ago quarter.

The year-over-year improvement was attributable to better underwriting results and reduced costs and expenses.

Including net realized investment gains, Infinity Property and Casualty's net income came in at 81 cents a share in the fourth-quarter, up 20.9% year over year.

Operational Update

Total revenue of Infinity Property and Casualty grossed $338.3 million, down 1.2% year over year. The decline resulted from significantly lower net realized investment gains in the quarter. However, revenues surpassed the Zacks Consensus Estimate of $330 million by 2.5%.

Gross written premium amounted to $313.2 million during the quarter, increasing 6.6% year over year. The increase was accountable to improvements in California personal auto (up 5% year over year), countrywide Commercial Vehicle (up14.5%) and Florida personal auto (up 26.4%).

Net investment income of Infinity Property and Casualty was $10.4 million in the quarter, up 13% year over year.

Costs and expenses of Infinity Property and Casualty trimmed 4.9% year over year to $325.1 million. This can be attributable to zero loss on redemption of long-term debt as against $13.6 million of loss incurred in the year-ago quarter, and lower losses and loss adjustment expenses.

Full-Year 2013 Highlights

Infinity Property and Casualty reported full-year 2013 operating net income of $2.45 per share, climbing sharply from 78 cents reported in 2012. The surge was driven by profitable business growth in the Florida and California personal auto segments and in countrywide Commercial Vehicle. Moreover, improving combined ratio resulting from rising rates and various underwriting actions also drove the earnings upside. However, the number missed the Zacks Consensus Estimate of $2.51 per share.

Including one-time items, net income of Infinity Property and Casualty for 2013 came in at $2.80 a share, jumping 37.3% year over year.

Revenues totaled $1.34 billion in 2013, up 7.6% year over year primarily due to higher net earnings.

Financial Update

Infinity Property and Casualty had cash and cash equivalents of $134.2 million as of 2013 end, improving from $87.3 million as of Sep 30, 2013.

Long-term debt of $275 million as of 2013-end remained in line with the third-quarter end level.

Infinity Property and Casualty had $143.3 million of cash flow from operations during 2013, up 3.5% year over year.

Zacks Rank

Infinity Property and Casualty presently carries a Zacks Rank #3 (Hold). Some better-raked stocks in the property and casualty insurance space are AmTrust Financial Services, Inc. ( AFSI ), American Financial Group Inc. ( AFG ) and Greenlight Capital Re, Ltd. ( GLRE ). All these stocks sport a Zacks Rank #1 (Strong Buy).

AMER FINL GROUP (AFG): Free Stock Analysis Report

AMTRUST FIN SVC (AFSI): Free Stock Analysis Report

GREENLIGHT CAP (GLRE): Free Stock Analysis Report

INFINITY PPTY (IPCC): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: AFG , AFSI , GLRE , IPCC

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