Allstate Sales and Profit Rise; Company Misses Analysts' Forecast
Allstate, the largest publicly traded home insurer in the United States, said that fourth-quarter earnings rose 16.5%, helped by low catastrophe losses, but missed analysts' estimates.
Operating earnings for the Northbrook, Ill.-based property and casualty insurer were $1.12 billion, or $1.78 a share. The insurer was expected to post fourth-quarter earnings of $1.84 a share, according to a Thomson Financial consensus estimate.
In the year-earlier fourth quarter, Allstate earned $975 million, or $1.49 before investment gains and losses.
Revenue at Allstate hit $9.102 billion, outstripping analysts' consensus estimate of $8.54 billion. In the year-ago period, the company garnered revenue of $8.945 billion.
Net earnings were $1.21 billion, or $1.93 a share, compared with $1.04 billion, or $1.59 a share, in the year-earlier quarter, when three hurricanes cost the insurer $5 billion in claims.
In after-market trading, Allstate stock fell more than 2% from its close of $64 a share on the New York Stock Exchange.
Analysts, while raising estimates for the company, have also downgraded it, saying the property casualty cycle is getting more competitive, particularly in auto insurance, where
Allstate is putting increased advertising dollars.
But car insurers have been reporting good earnings in the fourth quarter. Safeco said its net income rose about 13.5%, while auto insurer Progressive's profit was up 42%.
Allstate will hold an earnings conference call on Wednesday at 9 am New York time.
