) operating earnings for the first quarter of 2014 came in at 41
cents per share, beating the Zacks Consensus Estimate by a penny.
However, earnings fell a penny short of the year-ago results.
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Including net realized gains on securities (including net
impairment losses), net income came in at $321.3 million or 54
cents per share, increasing from $308.6 million or 51 cents per
share in the year-ago quarter.
Progressive recorded net premiums of $4.68 billion in the quarter
under review, up 5% from $4.45 billion a year ago. Net premiums
earned were $4.40 billion, up 5% from $4.18 billion in the
Net investment income improved 3% year over year to $103.3
Total revenue in the quarter improved 5.3% to $4.59 billion, well
above the Zacks Consensus Estimate of $4.29 billion.
On the other hand, total expense increased 6% to $4.23 billion in
the reported quarter. The major components contributing to the
increase in total expense were a 3% increase in policy
acquisition costs, a 7% rise in losses and loss adjustment
expenses and a 4% increase in other underwriting expenses.
Combined ratio − the percentage of premiums paid out as claims
and expenses − improved 100 basis points (bps) from the
prior-year quarter to 93.4%.
Numbers in March
Progressive publishes monthly financial reports. In the month of
March, policies in force remained healthy, with the Personal Auto
segment increasing 3% year over year to 13.28 million. Special
Lines increased 1% year over year to 3.92 million.
In Progressive's Personal Auto segment, Direct Auto grew 7% year
over year to 4.38 million. Agency Auto increased only 1% year
over year to 4.91 million. Progressive's Commercial Auto segment
declined 2% on a year-over-year basis.
Progressive reported book value per share of $10.86 as on Mar 31,
2014, up from $10.72 as of Feb 28, 2014.
Return on equity on a trailing 12-month basis was 17.6%, compared
with 17.9% in Feb 2014. The debt-to-total capital ratio was 22.4%
as of Mar 31, 2014, improving from 22.6% as of Feb 28, 2014.
Progressive carries a Zacks Rank #3 (Hold). Some better-ranked
insurers worth considering include
AmTrust Financial Services, Inc.
Atlas Financial Holdings, Inc.
). All these stocks sport a Zacks Rank #1 (Strong Buy).