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Tickers in this Article: TRV
The Travelers Companies (AMEX:TRV) announced its results for the second quarter on July 19, 2012. The Travelers Companies is a holding company that is engaged in providing commercial and personal property and casualty insurance products and services to businesses, government units, associations and individuals.

Earnings are perhaps the single most studied number in a company's financial statements because they show a company's profitability. SEE: Can Earnings Guidance Accurately Predict The Future?

The Numbers: The Travelers Companies' revenues topped expectations, though the company's EPS fell short of predictions. The company reported $1.26 per share versus the $1.38 per share estimate and revenues of $6.36 billion versus the $5.98 billion estimate. Slumping revenue in the last quarter ends The Travelers Companies' streak of two consecutive quarters of revenue increases. The Travelers Companies reported net income of $499 million during the second quarter.

Management Quote: "Our second quarter net income of $499 million benefited from meaningful improvement in our underlying underwriting margins as well as strong net investment income given the continuing low interest rate environment," commented Jay Fishman, Chairman and Chief Executive Officer. "However, earnings were also impacted by weather-related losses which, while much lower than in the prior year quarter, were considerably higher than we would have expected based on historical experience. "We continue to be very pleased with pricing trends across our businesses. In Business Insurance, renewal rate change exceeded 7%, with stable retentions, demonstrating the success of our active pricing strategy and our continued focus on improving profitability."

Looking Ahead: For next quarter, analysts have a more positive outlook about the company's expected results. The average estimate for the third quarter is $1.27 per share, up from $1.24 90 days ago. Increasing earnings estimate is a positive sign about the company and it typically leads a increase in the stock price. Over the past three months, the average estimate for the fiscal year has climbed from $5.81 per to share to $6.29.

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