AmTrust Financial (AFSI) Misses Q3 EPS by 16c

AmTrust Financial (NASDAQ: AFSI) reported Q3 EPS of ($0.04), $0.16 worse than the analyst estimate of $0.12.

• Gross written premium of $1.99 billion and net earned premium of $1.19 billion, down 2.1% and 0.3%, respectively
• Net loss attributable to common stockholders of $174.7 million, or $(0.89) per diluted share, compared to net income of $80.7 million, or $0.47 per diluted share
• Net loss includes $326.9 million of losses ceded to our adverse development cover, partially offset by $186.8 million gain on sale of policy management system to National General Holdings Corp
• Operating loss(1) of $7.5 million, or $(0.04) per diluted share, compared to operating earnings(1) of $106.0 million, or $0.61 per diluted share, in the third quarter 2016, primarily reflecting net catastrophe losses of $54 million
• Loss ratio of 106.1% compared with 67.8% primarily reflecting $326.9 million, or 27.4%, related to prior year adverse reserve development, which was all ceded to the adverse development cover, in addition to 4.5% related to catastrophe events and 1.3% for reinstatement and accelerated ceded earned premium(5) related to catastrophe reinsurance, adjusting to a loss ratio of 72.9%
• Expense ratio of 28.3%, compared with 25.4%, reflecting a net $31.4 million reclass expense to Service & Fee income and Other expense
• Combined ratio of 134.4% compared with 93.2%
• Adjusted underlying combined ratio(2) of 100.6%, after giving effect to losses ceded to the adverse development cover, excluding impact of catastrophe events, and after giving effect to reinstatement and accelerated ceded earned premium(5) related to catastrophe reinsurance, compared with 84.4%
• On a YTD basis, adjusted underlying combined ratio(2) of 95.5%, after giving effect to losses ceded to the adverse development cover, excluding impact of catastrophe events and after giving effect to reinstatement and accelerated ceded earned premium(5) related to catastrophe reinsurance, compared with 85.6%
• Book value per share of $13.26 based on 196.0 million common shares outstanding, compared to $13.81 based on 170.5 million common shares outstanding at year-end 2016
• Adjusted book value per share(3) of $14.38, reflecting after-tax deferred reinsurance gain from adverse development cover
• Weighted average number of diluted shares outstanding of 195.9 million, compared to 173.1 million, reflecting increased shares from privately placed common equity raise in May 2017
• Board of Directors approves payment of quarterly dividend on common stock of $0.17 per share

For earnings history and earnings-related data on AmTrust Financial (AFSI) click here.

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