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Chubb Third Quarter Earnings
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Chubb (NYSE:CB) announced its results for the third quarter on October 25, 2012. Chubb is a holding company that provides property and casualty insurance business to a wide range of customers.
Earnings are perhaps the single most studied number in a company's financial statements because they show a company's profitability. SEE: 12 Things You Need To Know About Financial Statements
The Numbers: Chubb announced $1.98 per share versus the $1.51 per share estimate. The company's net income for the quarter was $533 million. According to the reported number, this is up 78.9% from last year's figures. After posting a profit last quarter, the company breaks a streak of four consecutive quarters of year-over-year profit drops.
Management Quote: "Chubb's third quarter operating earnings per share of $1.98 were the highest of any quarter in Chubb's history," said John D. Finnegan, Chairman, President and Chief Executive Officer. "This record result reflected strong underlying underwriting performance as well as unusually low catastrophe losses. All three of our business units made significant contributions to these results, producing an outstanding 86.3% combined ratio. We're also encouraged by the rate increases we continued to obtain in all of our business units."
A Look Back: Although the company has been profitable for the last five quarters, income has fallen year-over-year by an average of 0.1% during that time. The quarter hit the hardest was the third quarter of the last fiscal year, which saw a 47.9% drop.
Looking Ahead: When earnings estimates stay consistent leading up to earnings season, this usually shows analysts accurately predicted earnings estimates and business is stable. Be cautious though as this may also be a warnings sign that earnings could come at a huge surprise to the upside or downside as analyst did not correctly predict earnings. Steady earnings estimates mean there is not enough change going on with the company to make analysts change their opinions. When earning estimates are steady, investors can look at the revenue trend for a more fundamental indicator. Over the past three months, the average estimate for the fiscal year has climbed from $5.84 per to share to $6.07.
Earnings are perhaps the single most studied number in a company's financial statements because they show a company's profitability. SEE: 12 Things You Need To Know About Financial Statements
The Numbers: Chubb announced $1.98 per share versus the $1.51 per share estimate. The company's net income for the quarter was $533 million. According to the reported number, this is up 78.9% from last year's figures. After posting a profit last quarter, the company breaks a streak of four consecutive quarters of year-over-year profit drops.
Management Quote: "Chubb's third quarter operating earnings per share of $1.98 were the highest of any quarter in Chubb's history," said John D. Finnegan, Chairman, President and Chief Executive Officer. "This record result reflected strong underlying underwriting performance as well as unusually low catastrophe losses. All three of our business units made significant contributions to these results, producing an outstanding 86.3% combined ratio. We're also encouraged by the rate increases we continued to obtain in all of our business units."
A Look Back: Although the company has been profitable for the last five quarters, income has fallen year-over-year by an average of 0.1% during that time. The quarter hit the hardest was the third quarter of the last fiscal year, which saw a 47.9% drop.
Looking Ahead: When earnings estimates stay consistent leading up to earnings season, this usually shows analysts accurately predicted earnings estimates and business is stable. Be cautious though as this may also be a warnings sign that earnings could come at a huge surprise to the upside or downside as analyst did not correctly predict earnings. Steady earnings estimates mean there is not enough change going on with the company to make analysts change their opinions. When earning estimates are steady, investors can look at the revenue trend for a more fundamental indicator. Over the past three months, the average estimate for the fiscal year has climbed from $5.84 per to share to $6.07.
by
Investopedia Staff
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