) fourth-quarter 2012 operating earnings per share of $1.55
significantly surpassed the Zacks Consensus Estimate of a loss of
42 cents and the year-ago loss of $2.06. As a result, operating
net income soared to $95.7 million from a loss of $137.7 million
in the prior-year quarter.
Operating earnings were calculated after payment of preferred
dividends. This also excluded after-tax net realized and
unrealized investment loss of 12 cents per share, which was
offset by net foreign exchange gains of 12 cents per share and
interest income of 1 cent per share from equity investments.
The year-ago quarter had recorded after-tax net realized and
unrealized investment gains of 85 cents per share, net foreign
exchange gains of 75 cents per share and interest expense from
equity investments of 3 cents per share.
Including these items, GAAP net income for PartnerRe stood at
$104.6 million or $1.56 per share against a loss of $22.4 million
or 49 cents per share in the year-ago quarter.
PartnerRe's total revenue declined 7.2% to $1.31 billion from
$1.41 billion in the year-ago quarter. However, total revenue
surpassed the Zacks Consensus Estimate of $1.29 billion.
This included net premiums earned of $1.17 billion (down 1.1%
year over year), net investment income of $135.7 million (down
12.7% year over year), pre-tax net realized and unrealized
investment gains of $5.1 million against $74.6 million in the
year-ago quarter and other income of $3.8 million, up from $3.1
million in the year-ago period. However, net premiums written
increased 4.6% year over year to $920.3 million.
During the reported quarter, total expense plunged 17.4% year
over year to $1.18 billion. Non-life combined ratio also
recovered to 95.3% from 121.7% in the year-ago period. This
reflects 23.7 points or $225 million related to catastrophe
losses due to Hurricane Sandy, while 16.7 points or $161 million
are related to net favourable loss development on prior accident
Moreover, the technical ratio improved across segments. The
technical result for the reported quarter was a positive of $122
million against a negative result of $127 million in the year-ago
Highlights of Full-Year 2012
PartnerRe reported operating earnings per share of $10.43 in
2012, beating the Zacks Consensus Estimate of $8.51 and a loss of
$9.50 in 2011. Operating net income increased to $663.8 million
versus a loss of $641.6 million in 2011. GAAP net income for
PartnerRe stood at $1.16 billion or $16.87 per share in 2012
compared with net loss of $537.0 million or $8.40 per share in
Total revenue improved 3.9% to $5.56 billion in 2012, also
exceeding the Zacks Consensus Estimate of $5.12 billion. Total
expense plunged 27.0% year over year to $4.23 billion. Non-life
combined ratio also improved to 87.8% from 125.4% in 2011.
As of Dec 31, 2012, PartnerRe's total assets were $22.98
billion, up from $22.86 billion at 2011-end. Total investments,
cash and funds held and directly managed stood at $18.0 billion,
up 1% from 2011-end. As of Dec 31, 2012, total capital was $7.7
billion (up from $7.3 billion at 2011-end) and total
shareholders' equity was $6.93 billion, up from $6.47 billion at
However, PartnerRe's net non-life loss and loss expense
reserves reduced by 5% to $10.4 billion from 2011-end, primarily
due to the impact of catastrophic events during 2011. The
company's book value per common share increased 19% to $100.84,
compared with $84.82 at the end of 2011.
Annualized operating ROE soared to 7.3% in the reported
quarter (down from 18.4% at the end of the prior quarter), while
annualized net income ROE stood at 7.4%, significantly lower than
35.5% in the prior quarter.
In 2012, annualized operating ROE stood at 12.3% (down from a
negative 10.1% at the end of 2011), while annualized net income
ROE stood at 19.9%, significantly increasing from a negative 9.0%
Share Repurchase Update
In the third quarter of 2012, the board approved a stock
repurchase authorization of up to 6.0 million shares.
Accordingly, the company bought back about 2.7 million shares
for $218 million during the reported quarter. Moreover, an
additional 0.4 million shares have been repurchased for $37
million so far in the first quarter of 2013, until Feb 5, 2013,
leaving about 2.7 million shares available for repurchases under
the current authorization.
On Feb 4, 2013, the board of PartneRe hiked its regular
dividend by 3% to 64 cents per share from the prior payout of 62
cents. The hiked dividend is payable on Mar 1, 2013, to the
shareholders of record as on Feb 19, 2013.
On Nov 30, 2012, PartneRe paid a regular dividend of 62 cents
to the shareholders of record as on Nov 19, 2012.
PartnerRe carries a Zacks Rank #3 (Hold). Other strong
performers in the insurance sector include
The Travelers Cos. Inc.
First American Financial Corp.
), all of which carry a Zacks Rank #1 (Strong Buy).
FIRST AMER FINL (FAF): Free Stock Analysis
PARTNERRE LTD (PRE): Free Stock Analysis
RLI CORP (RLI): Free Stock Analysis Report
TRAVELERS COS (TRV): Free Stock Analysis
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