PHLY's Blowout Quarter: Fool by Numbers

On Feb. 16, Philadelphia Consolidated Holdings (Nasdaq: PHLY  ) released fourth-quarter earnings for the period ended Dec. 31, 2006.

  • Net income for the fourth quarter skyrocketed 155.4% to $73.8 million, from $28.9 million -- although last quarter's results included a $26 million goodwill impairment charge.
  • The quarter's results were boosted by $13.2 million in favorable reserve development.
  • The combined ratio fell to 70.9% from 74.2%, thanks to a 310-basis point drop in the loss ratio and a 20-basis point decrease in the expense ratio.
  • Book value per share increased nearly 40% year over year, to $16.48 per share at the end of 2006.

(Figures in thousands, except per-share data)

Income Statement Highlights

Q4 2006

Q4 2005

Change

Premiums Earned

$307,596

$261,986

17.4%

Investment Income

$26,127

$17,866

46.2%

Net Income

$73,781

$28,887

155.4%

EPS

$1.00

$0.39

156.4%



Get back to basics with a look at an insurer's income statement.

Ratio Checkup

Q4 2006

Q4 2005

Change

Loss Ratio

42.6%

45.8%

(3.14%)

Expense Ratio

28.2%

28.4%

(0.18%)

Combined Ratio

70.9%

74.2%

(3.32%)

*Expressed in percentage points.

What do these ratios mean?

Balance Sheet Highlights

Assets

Q4 2006

Q4 2005

Change

Investments

$2,433,642

$1,934,985

25.8%

Cash and Equivalent

$108,671

$74,385

46.1%



Liabilities

Loss Reserve

$1,283,238

$1,245,763

3.0%

Unearned Premiums

$759,358

$631,468

20.3%



Learn your way around an insurer's balance sheet.

Related Companies:

  • Argonaut Group (Nasdaq: AGII  )
  • Chubb (NYSE: CB  )
  • Markel (NYSE: MKL  )
  • WR Berkley (NYSE: BER  )
  • White Mountains (NYSE: WTM  )

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

Fool contributor Emil Lee is an analyst and a disciple of value investing. He doesn't own shares in any of the companies mentioned above. Emil appreciates your comments, concerns, and complaints. The Motley Fool has a disclosure policy.


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