American Financial Group (AFG) Tops Q3 EPS by 17c; Raises Dividend

October 26, 2009 4:39 PM EDT

American Financial Group (NYSE: AFG) reports Q3 EPS of $1.09, 17 cents better than the analyst estimate of $0.92.

“Because of our strong third quarter results, driven primarily by better than expected underwriting results in our crop operations and favorable development in our run-off residual value insurance (“RVI”) operations, we have increased our core net operating earnings guidance for 2009 to be between $4.05 and $4.25 per share, up from $3.80 to $4.10 per share. Looking forward, we expect our core earnings in 2010 to be in the range of $3.10 to $3.50 per share. The 2010 earnings guidance is lower than that for 2009 due to the level of favorable reserve development recorded in 2009 (especially from RVI), the above average profitability in our crop operations in 2009, a continued soft market and lower investment returns expected in 2010. These expected results exclude the effect of significant catastrophe and crop losses, significant adjustments to asbestos and environmental reserves, and large gains or losses from asset sales.” (Consensus is $3.95)

Additionally, the Company announced today that its Board of Directors approved an increase in the company's annual dividend for 2010 from $.52 to $.55 per share of common stock. The increased dividend, when declared, will be paid on a quarterly basis of $.1375 per share of common stock. This will be the fifth consecutive annual dividend increase for the Company. The new dividend rate represents a six percent increase over the dividend paid in 2009.

Related Categories

Dividends
Earnings
Guidance

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