Hartford Financial (HIG) Tops Q4 EPS by 17c, Revenues Miss

Hartford Financial (NYSE: HIG) reported Q4 EPS of $0.78, $0.17 better than the analyst estimate of $0.61. Revenue for the quarter came in at $4.63 billion versus the consensus estimate of $4.79 billion.

• Fourth quarter 2018 income from continuing operations, after tax, totaled $196 million ($0.52 per diluted share1) compared with a loss from continuing operations, after tax, of $558 million ($1.56 per diluted share) in fourth quarter 2017, which included an $877 million charge related to U.S. corporate tax reform
• Fourth quarter 2018 core earnings* of $284 million ($0.78 per diluted share*) decreased slightly from $293 million ($0.81 per diluted share) in fourth quarter 2017 as higher catastrophe losses in property and casualty (P&C) offset increased core earnings in Group Benefits and Hartford Funds and the benefit of a lower U.S. corporate tax rate in 2018
• Full year 2018 income from continuing operations, after tax, totaled $1,485 million ($4.06 per diluted share1) compared with a loss from continuing operations, after tax, of $262 million ($0.72 per diluted share) in 2017. Full year 2018 core earnings grew 55% to $1,575 million ($4.33 per diluted share) from $1,014 million ($2.74 per diluted share) in 2017
• Full year 2018 P&C combined ratio of 97.8 improved 2.2 points from 2017 due to a lower current accident year loss ratio before catastrophes and higher favorable prior accident year development (PYD); full year 2018 P&C underlying combined ratio* improved 1.0 point to 91.5
• The Hartford also announced a share repurchase authorization of $1.0 billion, effective through Dec. 31, 2020
• In addition, the company provided its outlook for 2019 key business metric ranges for Commercial Lines and Personal Lines combined ratios and Group Benefits margins

“The Hartford had another great year in 2018, with many important accomplishments and excellent financial results," stated The Hartford’s Chairman and CEO Christopher Swift. "Even with elevated catastrophe losses, net income and core earnings were strong, and our net income and core earnings ROE2 were 13.7 percent and 11.6 percent, respectively.”

The Hartford’s President Doug Elliot said, “2018 was an excellent year for our P&C and Group Benefits businesses. Each is delivering strong underwriting and financial performance, and operationally we continue to achieve aggressive targets on our major initiatives. Commercial Lines had an outstanding result with a 92.6% combined ratio. In Personal Lines, 2018 results swung to a loss due to higher catastrophe losses, but underlying underwriting results and new business continued to improve. Group Benefits had outstanding results, with better than expected disability incidence and a strong contribution from the 2017 acquisition. We remain focused on delivering strong results in P&C and Group Benefits, including margins and top line growth.”

Swift continued, "With excellent financial results and expected excess capital generation, we are pleased to announce a new share repurchase authorization, totaling $1.0 billion, for use through year-end 2020. We also announced today the future operating model for Commercial Lines, including the Global Specialty business, to be formed upon closing the Navigators acquisition, which is expected in late March or April. We’re excited about the opportunities we see to create long-term shareholder value through strong operating performance, continued earnings growth, and disciplined capital management."

For earnings history and earnings-related data on Hartford Financial (HIG) click here.

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