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Tower Group Inc. (NASDAQ:TWGP) reported its results for the third quarter. Tower Group, through its subsidiaries, offers property and casualty insurance products and insurance services and products.
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Tower Group Inc. Earnings Cheat Sheet
Results: Reported a profit of $21.6 million (56 cents per diluted share) in the quarter. Tower Group Inc. had a net loss of $16.4 million or a loss 40 cents per share in the year-earlier quarter.
Revenue: Rose 5.7% to $434.7 million from the year-earlier quarter.
Actual vs. Wall St. Expectations: Tower Group Inc. reported adjusted net income of 62 cents per share. By that measure, the company missed the mean estimate of 61 cents per share. Analysts were expecting revenue of $431.8 million.
Quoting Management: Michael H. Lee, President and Chief Executive Officer of Tower Group, Inc., said, “During the quarter, we continued to see positive trends in our business in terms of growth and underwriting profitability as well as improving market conditions. Our growth during the quarter was driven by our organic initiatives which are focused on expanding our products, improving existing business units and creating new business units and improving the various operating processes associated with generating growth. We saw continued strength in our assumed reinsurance business and are beginning to see significant demand for customized product solutions with key distribution sources. In addition to seeing robust growth opportunities, we made significant progress in non-renewing unprofitable business and continued to drive rate increases across all business units. Because of this, we are confident about the profitability of our on-going business and remain well positioned to take advantage of the improving market conditions. We are also progressing well with our proposed merger transaction with the Bermuda reinsurance business of Canopius. Our fourth quarter operating results will be adversely affected by Superstorm Sandy, which will easily cause the largest catastrophic event in our history. Our sympathies go out to those who have been severely impacted by this event, including our policyholders, agents and employees situated in the affected areas. While it is premature to estimate the full extent of our insured losses, we are confident that our capital position for the year will not be materially impaired based on the claims reporting pattern thus far, our underwriting profile and robust reinsurance program, which was substantially strengthened after Hurricane Irene last year. Despite the obvious challenges arising from this event, we are proud of the performance and the dedication of our staff, who have been working around the clock to service our customers and agents.”
The company reported a profit last quarter, following a quarter of being in the red. The company booked a net loss of $20.6 million, or 52 cents per share, in the first quarter.
Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from 66 cents a share to 65 cents over the last ninety days. For the fiscal year, the average estimate has moved down from $1.45 a share to $1.43 over the last sixty days.
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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)
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