Net income totaled $812 million, compared with net income of $673 million in the year-ago quarter. The increase in net income is primarily due to lower catastrophic losses and a $32 million tax benefit, partially offset by lower investment income.
Investment income fell 9% from $695 million a year ago to $632 million, while underwriting gains nearly doubled from $257 million a year ago to $511 million this year.
Jay Fishman, the company’s CEO and chairman, said:
Our results were driven by strong underwriting performance across all of our business segments, as reflected in our consolidated combined ratio of 90.8%, as well as net investment income which was consistent with our expectations. We continue to deploy our capital first by seeking opportunities that offer attractive returns, and then by returning excess capital to shareholders. In the quarter, we returned almost $1 billion to shareholders, including approximately $800 million in share repurchases. … Given our strong product returns, our goal has been to retain a high percentage of business that meets our return thresholds, to improve profitability where needed, and to actively seek and quote on new business that is consistent with our profitability targets.
The company did not offer guidance with its earnings report. The consensus estimates from 26 analysts call for third-quarter EPS of $2.10 on revenues of $6.14 billion. For the full year, EPS are projected at $9.33 on revenues of $24.2 billion. The consensus price target on the stock is about $108.50.
Shares closed at $102.61 on Monday and were inactive in Tuesday’s premarket session. The stock’s 52-week range is $88.81 to $110.49.
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