ACE Limited Earnings: Here’s Why Shares are Lower

…For the year, after-tax operating income was $2.6 billion, up 13% from 2011. We produced $1.2 billion in underwriting income – an increase of 11% over prior year – and a combined ratio of 93.9%. This is an excellent underwriting result, particularly given the worst drought conditions in the U.S. in 25 years as well as the losses from Sandy. We also produced strong investment results, with investment income down less than 3% – a good performance considering record low interest rates. Our operating ROE was 11% and per share book value grew 12% for the year, bringing three-year and five-year compounded annual book value per share growth to 11.4% and 10.7%, respectively.

Key Stats:

Revenue decreased 28.77% from $5.14 billion in the previous quarter. Net income increased 19.53% from $640 million in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $1.88 to a profit $1.87. For the current year, the average estimate has moved down from a profit of $8.05 to a profit of $7.49 over the last ninety days.

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(Company fundamentals provided by Xignite Financials.)