The Travelers Companies Third Quarter Earnings

The Travelers Companies (AMEX:TRV) announced its results for the third quarter on October 18, 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 play an important role in measuring the appropriate valuation for a stock. Investors should be cautious if the company's stock price is high but it consistently has low earnings. SEE: Everything Investors Need To Know About Earnings

The Numbers: The Travelers Companies beat expectations with its latest EPS and revenue figures. The company reported $2.21 per share versus the $1.30 per share estimate and revenues of $6.51 billion versus the $5.98 billion estimate. EPS rose 179.7% while revenue climbed 1.6% from the same period last year. The Travelers Companies' revenue rose last quarter after falling 0.5% to $6.36 billion in the second quarter. The Travelers Companies reported net income of $864 million during the third quarter. This is 159.5% higher than the year-ago quarter.



Management Quote: "We are very pleased with our strong results this quarter," commented Jay Fishman, Chairman and Chief Executive Officer. "Our underwriting performance reflected a GAAP combined ratio of 90.3%, which benefited from lower weather-related losses as well as the rate gains we have achieved during the past year. Net investment income benefited from strong results in our non-fixed income portfolio."



Looking Ahead: Analysts appear increasingly optimistic about the company's results for the next quarter. The average estimate for the fourth quarter has moved up from $1.61 a share to $1.64 over the last 30 days. When analyst increase earnings estimates investors can assume business has been stronger than first thought and is an encouraging sign for investors. In the past month, the average estimate for the fiscal year has fallen from $6.37 per share to $6.24.