Allstate Corp. (ALL) delivered better-than-expected third-quarter results on Monday, even as profit fell precipitously on quarterly catastrophe losses that climbed to $1.08 billion.
The insurance company reported profit of $165 million or 32 cents a share, compared with year-ago earnings of $367 million, or 68 cents a share. On an adjusted basis excluding investment earnings, Allstate saw operating income fall to 16 cents a share, down from last year’s third-quarter earnings of 83 cents a share.
Revenue climbed to $8.24 billion during the quarter, up from last year’s revenues of $7.91 billion. Net premiums written fell slightly to $6.73 billion, down from $6.77 billion in the third quarter of 2010. Net premiums earned also came in slightly lower at $6.43 billion, down from $6.5 billion, one year ago.
The results beat expectations, as analysts were expecting adjusted earnings of 8 cents a share on premiums written totaling $6.74 billion.
"Maintaining auto insurance profitability and proactively managing our investment portfolio enabled us to overcome an increase of $691 million in catastrophe losses from the third quarter of 2010 and still earn a profit," said Thomas J. Wilson, chairman, president and chief executive officer of The Allstate Corporation, in a release. "Progress was made in improving auto insurance profitability in New York and Florida and raising underlying returns in homeowners insurance.”
The company also completed its share buyback program in the third quarter, completing the $1 billion repurchase plan authorized by the board in Nov. 2010.
Shares of Allstate fell 82 cents or 3% in Monday’s session, closing at $25.34. The stock shot up 6% in electronic trading following the announcement of results.