Travelers Companies Inc. (TRV) reported third-quarter 2009 EPS of $1.65, exceeding the Zacks Consensus Estimate of $1.30 per share.
The company reported third-quarter 2009 revenue of $6.3 billion, up 2.9% from $6.1 billion in the year-ago quarter. Within revenue, premiums for the quarter were $5.4 billion, down 0.5% from $5.5 billion in the year-ago quarter. Net Investment income for the quarter was $0.7 billion, up 6.6% from the year-ago quarter.
On the basis of revenue by business segments, Business Insurance contributed $3.4 billion in revenue, down 1.8% year-over-year; Financial Professional & International Insurance revenue was $0.9 billion, up 0.4% year-over-year; and Personal Insurance revenue was $1.9 billion, up 2.1% year-over-year.
Net written premiums for the third quarter was $5.3 billion, down 3% year-over-year. Business retention remained at high levels. Renewal rate changes were positive in each business segment, which helped offset the impact of lower coverage demands from existing policyholders stemming from general economic conditions. New business volumes were down marginally from the prior year quarter.
The company reported after tax catastrophe losses of $0.1 billion ($0.2 billion before tax), versus $0.7 billion ($1.0 billion pre tax) in the year-ago quarter. GAAP combined ratio improved to 89.7% in the third quarter of 2009 from 104.7% in the year-ago quarter. Book value per share for the third quarter was $51.24, up 22% from $41.94 in the year-ago quarter.
Operating income was $0.9 billion, up 177% from $0.3 billion in the year-ago quarter. Net income for the quarter increased to $0.9 billion, or $1.65 per share, compared to $0.2 billion, or $0.36 per share, in the year-ago quarter.
The company increased its shareholders’ equity by 5% to $28.2 billion and returned $1.2 billion to shareholders by way of common share dividends and common share repurchases. The company has been awarded a financial strength ratings of AA- and debt ratings of A- by S&P, and the rating agency revised the outlook for these ratings to positive from stable with a one-year time horizon.
Management has provided a full year 2009 guidance and expects the operating income per diluted share to range between $5.30 and $5.50, up from its previous range of $4.80 to $5.05. The company expects catastrophe losses of $570 million pre-tax and $0.4 billion after-tax, or $0.65 per diluted share, for the full year. Apart from this, the company has $3.3 billion with its share repurchase program, of which $1.5 billion is yet to be repurchased.
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