One of the largest U.S. car insurance providers, Progressive Corp. (PGR, Financial), reported its first-quarter earnings last Tuesday. The company registered net income of $1.22 per share, which was above analysts’ expectations of $1.18 per share. Here’s a comprehensive look at the company’s quarterly performance.
Bird’s-eye view
The insurer recorded first-quarter revenue of $7.43 billion, beating consensus estimates of $7.34 billion. Revenue grew 82% from the prior-year quarter. While the company saw 20% growth in service revenue, it witnessed 29% growth from investment income.
The company wrote off net premiums amounting to $7.9 billion during the quarter, up 23% from the same period last year. Furthermore, Progressive earned net premiums amounting to $7.2 billion, up 19% from $6 billion in the year-ago quarter.
The company’s expenses totaled $6.5 billion, up 6.5% year over year. Progressive attributed the increase to an 18.6% increase in policy acquisition costs, a 15.9% rise in other underwriting expenses, a 7.1% increase in investment expenses and 13.1% higher service expenses.
Robust performance from some of the company’s divisions also contributed to the quarterly growth. Progressive’s Commercial Auto segment witnessed 8% year-over-year growth in March to 0.7 million. In the same month, the property business had approximately 1.7 million policies in effect. As far as Progressive’s Personal Auto segment is concerned, Direct Auto jumped 8% in March to 6.4 million while Agency Auto spiked 13% to 5.9 million.
Financial position
After the earnings beat, the company now stands with a market capitalization of $35.86 billion. Furthermore, the company has a return on assets of 4.3% and a return on investment of 13.1%. Progressive’s price-earnings ratio is 23.52 and its forward price-earnings ratio is 15.53.
Disclosure: I do not hold any positions in the stocks mentioned in this article.
