Wednesday, insurer Everest Re Group Ltd. (RE), reported a rise in the first-quarter profit from the year-ago period, reflecting narrowed net realized capital losses and gain on debt repurchase, which offset decline in net investment income and widened derivative loss.
The Hamilton, Bermuda-based company's first-quarter net income increased to $108.56 million or $1.77 per share from $77.93 million or $1.24 per share in the corresponding quarter last year. On average, nine analysts polled by Thomson Reuters estimated earnings of $2.81 per share for the quarter. Analysts' estimates typically exclude special items.
The company reported other comprehensive loss, net of tax, for the quarter of $2.79 million compared to $3.99 million in the similar period last year.
Comprehensive income for the quarter increased to $105.77 million from $73.94 million in the comparable quarter last year.
Total revenues for the quarter increased to $989.30 million from $916.77 million in the first-quarter of fiscal year 2008. Analysts estimate revenue of $878.29 million for the quarter.
Commenting on the results, Chairman and CEO, Joseph Taranto said, "Everest's solid franchise, long term relationships, sound balance sheet, and excellent financial ratings, have facilitated growth as our clients seek stability and security from their reinsurance partners."
Segment wise, Premiums earned for the quarter increased to $932.29 million from $911.97 million in the first-quarter last year. Net investment income for the quarter was $68.75 million, down from $150.13 million in the comparable quarter of fiscal 2008.
Net realized capital losses for the quarter narrowed to $65.14 million from a net loss of $136.38 million in the similar period last year. The company reported a realized gain on debt repurchase of $78.27 million compared to none in the prior-year similar period.
Net derivative loss for the quarter widened to $19.70 million from $3.80 million in the corresponding quarter last year. Other expense for the quarter was $5.18 million compared to $5.16 million last year.
Everest reported first quarter 2009 after-tax operating income of $106.1 million or $1.73 per share compared to $190.6 million or $3.03 per share in the first quarter of 2008.
Income tax expense for the quarter was $24.52 million, up from $6.31 million in the corresponding period last year.
Total claims and expenses for the quarter increased to $856.22 million from $832.53 million in the prior-year similar quarter.
During the quarter, the company completed a cash tender offer for the purchase of its 6.6% Fixed to Floating Rate Long Term Subordinated Notes due 2067. Everest purchased approximately 40% of the outstanding notes, reducing debt by $161.3 million at an approximate cost of $83 million. This transaction resulted in an after-tax gain of $50.9 million.
Cash flow from operations was $180.5 million for the period, compared to $250.6 million in the first quarter of 2008. Book value per share ended the quarter at $81.89, up 1.4% from $80.77 at December 31, 2008.
Among others in the industry, Pembroke, Bermuda-based insurance provider Argo Group International Holdings Ltd. (AGII) reported a decline in fourth-quarter profit on higher expenses, even as revenues increased 30.8% from the prior year quarter. Fourth-quarter net income declined to $11.8 million or $0.38 per share from $23.5 million or $0.76 per share in the same quarter last year. Total revenue for the quarter increased 30.8% to $347.1 million from $265.4 million in the comparable quarter last year.
White Mountains Insurance Group Ltd. (WTM) reported a loss in the fourth quarter that reflected losses in its equity portfolio and Life Re business. Fourth quarter net loss for White Mountains was $212.4 million or $32.60 per share, compared to a profit of $101.2 million or $9.55 per share in the same quarter a year ago. Total revenues for the quarter plunged to $360.6 million from $1.20 billion in the same quarter a year ago.
Everest closed Wednesday's regular trading at $73.40, up $0.27 or 0.37%, on a volume of 0.86 million shares on the NYSE. After hours, the stock lost $2.15 or 2.93%, trading at $71.25.
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