NORTHFIELD TOWNSHIP (dpa-AFX) - Home and auto insurer Allstate Corp. (ALL), Wednesday said its third-quarter profit soared from a year ago, when results were burdened by huge catastrophe losses related to Hurricane Irene and Tropical Storm Lee.
Catastrophe losses for the three-month period dropped sharply to $206 million from $1.08 billion last year. Hurricane Irene and Tropical Storm Lee had deeply impacted Allstate's bottom line in third quarter last year.
Nevertheless, next quarter results are expected to include huge catastrophe losses from the recent Superstorm Sandy that lashed the US east coast for last two days. Sandy caused blackouts from Virginia to Massachusetts, closed New York City's three main airports, flooded the NYC subway system. It has also put the Presidential election campaign on hold, while both NYSE and Nasdaq remained closed for two days.
Chief Executive Thomas Wilson in a statement said, 'We are on pace to achieve our 2012 operating priorities which resulted in strong financial performance in the third quarter with net income of $723 million.'
Nonetheless, Wilson did not provide any outlook, or mention the catastrophe losses expected from Hurricane Sandy.
Consolidated revenue for the quarter was $8.13 billion, down from $8.24 billion last year.
Property-liability insurance premiums written for the quarter, which accounts for the most business, rose to $6.70 billion from $6.43 billion last year.
Analysts estimated revenues of $6.95 billion for the quarter.
Property-Liability combined ratio for the quarter improved to 90.2 percent from 104.8 in the prior year period. Combined ratio is a measure of profitability used by insurance companies. A ratio below 100 percent indicates the company is making underwriting profit while a ratio above 100 percent means it is paying out more money in claims than it is receiving from premiums.
Allstate's third-quarter profit soared to $723 million or $1.48 per share from $175 million or $0.34 per share last year.
Operating income rose to $717 million or $1.46 per share from $80 million or $0.16 per share last year. On average, 27 analysts polled by Thomson Reuters expected earnings of $1.13 per share for the quarter. Analysts' estimates typically exclude special items.
Book value, calculated by total assets minus intangible assets and liabilities, at September 30 was up 22.4 percent at $42.64 per share, compared to $34.84 per share last year.
ALL closed Wednesday's trading at $39.98, down $0.17 or 0.42%, on a volume of 7.2 million shares, on the NYSE. The stock however gained $1.01 or 2.53% in after-hours trade.
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