The Travelers Companies Earnings: Revenue Falls After Two Straight Increases

S&P 500 (NYSE:SPY) component The Travelers Companies Inc. (NYSE:TRV) reported its results for the second quarter. 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.

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The Travelers Companies Inc. Earnings Cheat Sheet

Results: Reported a profit of $499 million ($1.26 per diluted share) in the quarter. The Travelers Companies Inc. had a net loss of $364 million or a loss 88 cents per share in the year-earlier quarter.

Revenue: Fell 0.5% to $6.36 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: The Travelers Companies Inc. fell short of the mean analyst estimate of $1.38 per share. It beat the average revenue estimate of $5.98 billion.

Quoting Management: “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.”

Key Stats:

A year-over-year revenue decrease last quarter snaps a streak of two consecutive quarters of revenue increases. Revenue rose 1.8% in the first quarter and 0.6% in the fourth quarter of the last fiscal year.

The company fell short of estimates last quarter after beating the mark the quarter before with net income of $2.01 versus a mean estimate of net income of $1.52 per share.

Looking Forward: 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 ninety days ago. 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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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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