XL Group plc
) third-quarter 2012 operating income of 61 cents per share
outpaced the Zacks Consensus Estimate by 22%. Earnings
soared nearly 118% from 28 cents incurred in the year-ago
quarter. Operating income was $188.3 million, up 112% year over
ACE LIMITED (ACE): Free Stock Analysis Report
XL GROUP PLC (XL): Free Stock Analysis Report
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Better underwriting results along with lower net realized losses
on investments and derivatives aided the company to post better
Including net realized losses on investments of $5.7 million, net
realized and unrealized gains on derivatives of $6.2 million, net
realized and unrealized gains on investments and derivatives
related to the insurance company affiliates of $0.01 million and
foreign exchange losses of $16.7 million, XL Group reported net
income of $171.9 million or 56 cents, compared favorably with
$42.4 million or 14 cents per share in the year-ago quarter.
Total revenue in the quarter was $1.82 billion, up 9.6% year over
year. Revenue was higher than the Zacks Consensus Estimate of
Net premiums earned in the quarter increased 6.5% year over year
to $1.59 billion.
Net investment income of $239.5 million in the quarter was down
17.5% year over year, largely due to lower investment rates
inducing lower yields.
XL Group's underwriting profit was $114.2 million, rebounding
from the loss of $22.2 million incurred in the year-ago quarter.
The combined ratio in the third quarter improved substantially by
940 basis points year over year to 92.2% in the quarter.
Operating expenses escalated 23.4% year over year to $305.7
million, primarily attributable to the build-out of previously
: Gross premiums written in the quarter was $1.58 billion, down
11.3% year over year. Lower premium at reinsurance segment was
attributable to North America Property, where the Heartland Crop
program was renewed as reinsurance rather than as primary
business more than offset the slight increase in the Insurance
segment. This was driven by new business initiatives and
favorable pricing in North America Property and Casualty and
improved pricing in Professional, partially offset by movements
in foreign exchange rates and targeted non-renewals in
International General Property.
Net premiums earned improved 7.8% year over year in the quarter
Combined ratio (excluding prior-year development and the impact
of natural catastrophe losses) improved 240 basis points to 92.5%
in the quarter.
: Gross premiums written declined 13.1% year over year to $87.4
million in the third quarter.
Net premiums earned of $79.5 million in the quarter waned 12.5%.
XL Group exited the quarter with cash and cash equivalents of
$3.2 billion, down from 2011 level end of $3.8 billion.
Notes payable and debt at quarter end were $1.67 billion
declining from $2.27 billion at 2011 end.
Book value per ordinary share as of September 30, 2012, was
$32.82, up 2.7% from $31.96 as of June 30, 2012. The improvement
was driven by net income, unrealized gains on investments and the
benefit of share buybacks.
Share Repurchase Update
In the third quarter, XL Group spent $125 million to buy back 5.3
million shares at an average price of $23.44.
The company is left with $400 million under its authorization.
), which competes with XL Group reported third quarter 2012
operating income of $2.01 per share, breezing past the Zacks
Consensus Estimate by 15 cents. Earnings however, declined 9%
from $2.20 earned in the year-ago quarter.
The results were hugely affected by drought conditions in the
U.S. that hampered the company's crop business. Nevertheless, ACE
Limited delivered sturdy underwriting results.
We maintain our Neutral recommendation on XL Group. The
quantitative Zacks #2 Rank (short term Buy rating) for the
company indicates upward thrust on the stock over the near term.