On April 24, insurance and reinsurance provider XL Capital (NYSE:XL) released first-quarter earnings for the period ended March 31.
- Net income powered ahead by nearly 20%, and operating earnings of $3.03 per share beat analyst estimates by $0.86 per share.
- The quarter included $55 million of pre-tax catastrophe losses from windstorm Kyrill, lower than the guidance of $60 million to $75 million in losses.
- The expense ratio for the general insurance and reinsurance segments increased by 260 basis points compared to last year, thanks to higher compensation costs for business development and performance-based programs.
- The company ended the quarter with $54.95 per share in book value, giving it a 1.3 price-to-book multiple, which is lower than or in line with competitors like Arch Capital Group (NASDAQ:ACGL), RenaissanceRe (NYSE:RNR), and Everest Re (NYSE:RE).
(Figures in millions, except per-share data)
Income Statement Highlights
|
Q1 2007 |
Q1 2006 |
Change | |
|---|---|---|---|
|
$1,791 |
$1,819 |
(1.5%) | |
|
Investment Income |
$553 |
$464 |
19.3% |
|
Net Income |
$550 |
$459 |
19.9% |
|
EPS |
$3.06 |
$2.56 |
19.5% |
Get back to basics with the income statement.
Ratio Checkup
|
Q1 2007 |
Q1 2006 |
Change* | |
|---|---|---|---|
|
Loss Ratio |
62.2% |
64.1% |
(1.90%) |
|
Expense Ratio |
28.2% |
25.6% |
2.60% |
|
90.4% |
89.7% |
0.70% | |
|
Return on Equity |
22.4% |
20.4% |
2.00% |
**General insurance and reinsurance divisions.
Balance Sheet Highlights
|
Assets |
Q1 2007 |
Q1 2006 |
Change |
|---|---|---|---|
|
Investments |
$39,796 |
$36,772 |
8.2% |
|
Cash and Equivalent |
$3,371 |
$2,263 |
49.0% |
|
Liabilities | |||
|---|---|---|---|
|
$22,806 |
$23,734 |
(3.9%) | |
|
Unearned Premiums |
$6,651 |
$6,392 |
4.0% |
|
Long-Term Debt |
$3,369 |
$3,368 |
0.0% |
The balance sheet reflects the company's health.
Related Foolishness:
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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.
