Allstate Second Quarter Earnings

Allstate (NYSE:ALL) announced its results for the second quarter on July 31, 2012. Allstate provides insurance on personal property as well as offering casualty insurance, life insurance, retirement, and investment products.

A business' earnings are the main determinant of its share price because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run. SEE: Surprising Earnings Results

The Numbers: Allstate's latest numbers were good, as the company announced EPS and revenues that came in ahead predictions. The company reported 86 cents per share versus the 72 cents per share estimate and revenues of $8.28 billion versus the $6.44 billion estimate. EPS rose from a loss of $1.19 per share in the year-ago quarter while revenue climbed 2.4%. Allstate's revenue has grown during each of the past four quarters on a year-over-year basis. For the second quarter, the company reported profit of $423 million.



Management Quote: "We made good progress this quarter on our 2012 operating priorities of maintaining auto profitability, improving returns in homeowners insurance and annuities, growing insurance premiums, and proactively managing our investments and capital," said Thomas J. Wilson, chairman, president and chief executive officer of The Allstate Corporation. "We improved our underlying margins in both auto and homeowners insurance. Our investment portfolio generated solid returns in a challenging interest rate environment. During the quarter, we repurchased 8.2 million shares of common stock for $275 million. With an increase in book value per share of 9.8% since year-end 2011 and a dividend yield around 2.5%, we are generating solid value for our shareholders."



Looking Ahead: For the next quarter, analysts are growing pessimistic about the company's expected results. The average estimate for the third quarter is 75 cents per share, dropping from 78 cents a month ago. Increasing earnings estimate is a positive sign about the company and it typically leads a increase in the stock price. A decreasing earning estimate is a negative sign and usually leads to a drop in the stock price. The average estimate for the fiscal year is $3.95 per share, a rise from $3.75 90 days ago.