On Tuesday, the board of property-casualty and life reinsurer -
) approved and authorized a new stock repurchase worth 6.0 million
shares. The latest sanction will be effective immediately. The
decision reflects the company's trend of returning wealth to its
shareholders from time to time, depending on market conditions.
PartnerRe bought back about 3.0 million shares for $210 million
during the second quarter of 2012, while a total of 3.1 million
shares worth $222 million were purchased back in the first half of
2012. An additional 0.5 million shares were repurchased for $34
million in July this year, while 0.7 million shares were bought
back last month.
Consequently, about $1.0 million shares remain available from
the last authorization, which was put into action in November last
year with an approval to extend its prior stock repurchase program
up to 7.0 million shares. Moreover, PartnerRe has approximately
22.9 million common shares, which were held in treasury and are now
available for re-issuance.
PartnerRe seeks to elevate its capital position through
meaningful business opportunities. On the other hand, management
utilizes the company's capital by deploying excess of it via share
repurchases and dividend payouts, in order to generate adequate
capital returns. The accretive impact of share repurchases also
aids book value and earnings to augment on a per share basis.
A stable ratings outlook affirmation from A.M. Best, S&P,
Moody's Investor Service of
) and Fitch Ratings further validates the company's overall
operational synergies in order to augment its long-term growth
profile. This is satisfactory compared with its peer group.
At the end of July 2012, PartnerRe reported second quarter
operating earnings per share of $2.20. This significantly surpassed
the Zacks Consensus Estimate of $2.02 and the year-ago earnings of
Results benefited year over year from improved underwriting and
technical results coupled by a significant reduction in the total
expenses and combined ratio, which also drove the earnings, return
on equity (ROE) and book value. However, top line deteriorated due
to low net realized and unrealized investment gains, continued
decline in premiums earned due to cancellations and non-renewals in
the prior quarters, along with lower investment income driven by
low reinvestment and risk-free rates.
For the third quarter of 2012, earnings are pegged at $1.80 per
share by the Zacks Consensus Estimate, and are expected to decline
about 26% year over year. However, earnings are expected to
escalate by about 190% over the prior year in 2012 to $8.54 a
share. Currently, PartnerRe holds a short-term Zacks #3 Rank, which
implies a Hold rating.
MOODYS CORP (MCO): Free Stock Analysis Report
PARTNERRE LTD (PRE): Free Stock Analysis Report
To read this article on Zacks.com click here.