Platinum Underwriters Holdings Ltd.
) reported its third-quarter 2013 net earnings of $1.32 per
share, which beat the Zacks Consensus Estimate of $1.00. However,
the results declined 48% from the year-ago quarter number of
$2.54 per share.
Net income fell 54.9% from the year ago quarter to $38.3 million.
The decline was primarily due to $0.3 million of net realized
losses on investments during the reported quarter, compared to
$23 million of net realized gains on investments in the
Quarterly Operational Update
Total revenue of Platinum Underwriters decreased 16.2% year over
year to $154.2 million in the reported quarter. The decline was
mainly due to net premiums earned that reduced 1.5% year over
year to $135.4 million. Additionally, net investment income
declined 23.5% to $17.7 million.
Meanwhile, total expenses of Platinum Underwriters increased 4.3%
year over year to $100.7 million. The rise was primarily due to
higher operating expenses, which rose 3.5% and net acquisition
expenses, which rose 17.2% from the prior-year quarter.
Consequently, combined ratio deteriorated to 65.5% in the
reported quarter from 61.3% in the year-ago period.
Quarterly Segment Update
Property and Marine Segment:
Net premiums written were $59.2 million, down 8.8% year over
year, during the reported quarter.
Underwriting income declined substantially by 54.1% year over
year to $9.3 million. Combined ratio deteriorated 1600
basis points (bps) year over year to 83.1%.
Net premiums written decreased 3.3% year over year to
approximately $70 million. Underwriting income for the segment
improved 11.6% year over year to $37.5 million in the
quarter. Combined ratio improved 400 bps year over year to
Finite Risk Segment:
Net premiums written of $8.7 million in the third quarter of 2013
remained in line with the year-ago quarter results.
Underwriting loss in the reported quarter was $0.12 million
compared to $0.27 million in the prior-year quarter. Combined
ratio improved 280 bps year over year to 101.5%.
In an effort to enhance its shareholder value, Platinum
Underwriters repurchased nearly 1.4 million of its shares for
$78.5 million during the reported quarter.
As of Sep 30, 2013, Platinum Underwriters had total assets worth
$4 billion, including cash and cash equivalents of $1.56 billion.
Total debt obligation of Platinum Underwriters was in line with
the 2012 year-end level of $250 million. Book value per share as
of Sep 30, 2013 was $60.87, up 5.1% from the 2012-end level.
Platinum Underwriters presently carries a Zacks Rank #1 (Strong
Buy). Other stocks in the sector that are worth a look include
Everest Re Group Ltd.
). All of these have a Zacks Rank #1.
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