Assurant (AIZ) Misses Q4 EPS by 41c, Revenues Beat

Assurant (NYSE: AIZ) reported Q4 EPS of $1.98, $0.41 worse than the analyst estimate of $2.39. Revenue for the quarter came in at $2.61 billion versus the consensus estimate of $2.54 billion.

Key Highlights for Full-Year 2019

• Net income of $363.9 million, or $5.84 per share, up 54 percent and 47 percent, respectively
• Net operating income1 of $533.0 million, or $574.0 million excluding reportable catastrophes2, up 54 percent and 11 percent, respectively
• Net operating income per diluted share3 of $8.55, or $9.21 excluding reportable catastrophes4, up 47 percent and 6 percent, respectively
• $426 million returned to shareholders in share repurchases and common dividends
• Note: References to net income (loss) refer to net income (loss) attributable to common stockholders. Comparisons in the financial highlights relate to last year’s prior period unless otherwise noted. Full-year 2019 earnings included $18.0 million of disclosed items, comprised of a $9.9 million charge related to Global Preneed in the third quarter and $8.1 million of severance related to the company’s multi-year IT transformation in the fourth quarter.

“We are pleased with our overall performance in 2019, delivering earnings growth in-line with our expectations. Importantly, we also strengthened our partnerships with leading brands and invested in capabilities to sustain business growth and achieve a more diversified mix of earnings in 2020,” said Assurant President and CEO Alan Colberg.

Colberg added, “We believe our unique position supporting consumers’ connected lifestyles across mobile, home and auto will drive continued outperformance long-term.”

Company Outlook

For full-year 2020, the company expects:

• Assurant net operating income per diluted share, excluding catastrophe losses7, to increase 10 percent to 14 percent from $9.21 in 2019. This will be driven by profitable growth across all business segments, as well as share repurchases. Mandatory convertible shares are expected to be dilutive for the year versus anti-dilutive in 2019.
• Net operating income growth, excluding catastrophes, to reflect modest growth in Global Lifestyle driven primarily by Connected Living, and to a lesser extent Global Automotive. This will be partially offset by continued declines in legacy Global Financial Services and investments to support growth. Global Housing earnings, excluding catastrophe losses, to expand across all business lines, partially offset by the previously disclosed loss of loans from a financially insolvent client.
• Corporate and Other full-year net operating loss 7 to approximate $85 million, consistent with 2019, benefitting from ongoing expense efficiencies. Interest expense and preferred dividends are expected to be approximately $81 million and $19 million, respectively.
• Business segment dividends from Global Lifestyle, Global Housing and Global Preneed to approximate segment net operating income, including catastrophe losses. This is subject to the growth of the businesses, and rating agency and regulatory capital requirements.
• Capital to be deployed to support business growth, fund investments and return capital to shareholders in the form of share repurchases and dividends, subject to Board approval and market conditions.

For earnings history and earnings-related data on Assurant (AIZ) click here.

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