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Platinum Underwriters Beats Q3 Earnings, Revs Down - Analyst Blog

Posted
10/18/2013 12:40:00 PM
By: Zacks.com
Referenced Stocks:ACE;PTP;RE;Y

Platinum Underwriters Holdings Ltd. ( PTP ) 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 prior-year quarter.

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%.

Casualty Segment: 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 48.3%.

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%.

Share Repurchase

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.

Financial Position

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.

Zacks Rank

Platinum Underwriters presently carries a Zacks Rank #1 (Strong Buy). Other stocks in the sector that are worth a look include ACE Limited ( ACE ), Alleghany Corporation ( Y ) and Everest Re Group Ltd. ( RE ). All of these have a Zacks Rank #1.



ACE LIMITED (ACE): Free Stock Analysis Report

PLATINUM UNDRWT (PTP): Free Stock Analysis Report

EVEREST RE LTD (RE): Free Stock Analysis Report

ALLEGHANY CORP (Y): Free Stock Analysis Report

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