The Progressive Corporation’s PGR second-quarter 2020 earnings per share of $1.83 beat the Zacks Consensus Estimate of $1.72. Moreover, the bottom line increased 10.2% from the year-ago quarter.
Behind the Headlines
Net premiums written were $10.1 billion in the quarter under review, up 11% from $9.1 billion in the year-ago period. Net premiums earned grew 9% year over year to $9.6 billion.
Net realized gains on securities were $890.8 million, marking a nearly five-fold increase year over year.
Combined ratio — percentage of premiums paid out as claims and expenses — improved 27 basis points (bps) from the prior-year quarter’s level to 87.7.
The Progressive Corporation Price, Consensus and EPS Surprise
The Progressive Corporation price-consensus-eps-surprise-chart | The Progressive Corporation Quote
June Numbers Solid
Operating revenues were $3.2 million, up 9.3% year over year. The improvement can be attributed to a 10.1% increase in premiums, 3.3% growth in fees and other revenues and 18.8% rise in service revenues. However, 16% lower investment income was a partial offset.
Total expenses increased 3.4% year over year to $2.7 billion due to 25.2% higher other underwriting expenses and 9.4% increase in policy acquisition costs. Expenses also include $16 million in policyholder credit expense.
In June, policies in force were impressive at the Personal Auto segment, having improved 11% from the year-ago month to 15.9 million. Special Lines improved 6% from the prior-year month’s figure to 4.8 million.
In Progressive’s Personal Auto segment, Direct Auto grew 13% year over year to 8.5 million while Agency Auto improved 9% year over year to 7.4 million.
Progressive’s Commercial Auto segment rose 6% year over year to 0.8 million. The Property business had about 2.3 million policies in force in the month, up 13% year over year.
Progressive’s book value per share was $27.63, as of Jun 30, 2020, up 25.7% from $21.98 as of Jun 30, 2019.
Return-on-equity in the second quarter of 2020 was 34.9%, having expanded 60 bps year over year. Debt-to-total capital ratio improved 40 bps year over year to 24.4% as of Jun 30, 2020.
Progressive currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
W.R. Berkley Corporation WRB will release second-quarter 2020 earnings on Jul 21. The Zacks Consensus Estimate for the same stands at 40 cents per share.
RLI Corporation RLI will release second-quarter 2020 earnings on Jul 22. The Zacks Consensus Estimate for the same stands at 47 cents per share.
The Travelers Companies TRV will release second-quarter 2019 earnings on Jul 23. The Zacks Consensus Estimate for the same stands at $1.31 per share.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The Travelers Companies, Inc. (TRV): Free Stock Analysis Report
W.R. Berkley Corporation (WRB): Free Stock Analysis Report
RLI Corp. (RLI): Free Stock Analysis Report
The Progressive Corporation (PGR): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.