Assurant Inc. AIZ is scheduled to report first-quarter 2015 results after the market closes on May 5.
Last quarter, this multi-line insurer missed the estimate delivering a 47.59% negative earnings surprise. The company’s average surprise for the trailing four quarters is -4.71% though it missed only last quarter.
How will Assurant fare this quarter? Let's see what factors might have influenced the earnings report this time around.
Factors Likely to Influence Q1 Results
Assurant’s results during the quarter were likely to have experienced a slower return to profitability for Health and lower margins in Specialty Property. Another source of earnings disappointment will likely be the slow pace of underwriting improvement in its Employee Benefits’ segment.
Moreover, the company’s Solution line which was a wild card for its earnings is also expected to see a decline in business volume due to foreign exchange volatility and the loss of a domestic mobile tablet business.
Assurant’s Specialty segment will see a decline in its revenues due to the loss of client business and the sale of the former general agency business, American Reliable Insurance Company, which closed on Jan 1, 2015.
The bottom line will, however, get a lift from a lower number of shares owing to buyback.
Earnings Whispers?
Our proven model does not conclusively show that Assurant is likely to beat the Zacks Consensus Estimate this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or at least 2 (Buy) or 3 (Hold) for this to happen. But this is not the case here as elaborated below.
Zacks ESP: Assurant’s Most Accurate estimate is pegged at 84 cents per share, which is below the Zacks Consensus Estimate of $1.02. The Earnings ESP is thus -17.65%.
Zacks Rank: Assurant has a Zacks Rank #3. Though this increases the predictive power of ESP, the company’s ESP of -17.65% makes surprise prediction difficult.
Stocks to Consider
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
The Allstate Corporation ALL has an Earnings ESP of +5.04% and a Zacks Rank #3.
Manulife Financial Corporation MFC has an Earnings ESP of +2.94% and Zacks Rank #2.
Endurance Specialty Holdings Ltd. ENH has an Earnings ESP of +2.1% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment