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Axis Capital (AXS) Up 3.8% Since Last Earnings Report: Can It Continue?
AXSAXIS Capital(AXS) ZACKS·2025-02-28 17:36

Core Viewpoint - Axis Capital reported strong fourth-quarter earnings, surpassing estimates, driven by improved underwriting income and net investment income, despite higher expenses and a slight miss in total operating revenues [2][3][12]. Financial Performance - Fourth-quarter operating income was 2.97pershare,exceedingtheZacksConsensusEstimateby10.82.97 per share, exceeding the Zacks Consensus Estimate by 10.8%, with a year-over-year increase of 1% [2]. - Total operating revenues reached 1.6 billion, missing estimates by 2.8%, but reflecting a 6.7% year-over-year growth [3][12]. - Net premiums written increased by 14% to 1.2billion,witha91.2 billion, with a 9% rise in the Insurance segment and a 64% surge in the Reinsurance segment [3]. Investment Income - Net investment income rose 5% year over year to 195.8 million, driven by fixed maturities portfolio income, despite lower returns on alternative investments [4]. Expense Analysis - Total expenses increased by 38.4% year over year to 1.2billion,influencedbyhighergeneralandadministrativeexpenses,acquisitioncosts,andforeignexchangegains[5].UnderwritingPerformance−Underwritingincomeimprovedsignificantlyto1.2 billion, influenced by higher general and administrative expenses, acquisition costs, and foreign exchange gains [5]. Underwriting Performance - Underwriting income improved significantly to 129.5 million from a loss of 274millioninthepreviousyear,withacombinedratioof94.2274 million in the previous year, with a combined ratio of 94.2%, improving by 3040 basis points [6]. Segment Results - In the Insurance segment, gross premiums written rose 7.4% to 1.7 billion, while net premiums earned increased by 11.9% to 1billion[7].−TheReinsurancesegmentsawgrosspremiumswrittenincreaseby36.91 billion [7]. - The Reinsurance segment saw gross premiums written increase by 36.9% to 275 million, with net premiums earned rising 0.7% to 351million[9].Full−YearHighlights−Forthefullyear,totaloperatingrevenueswere351 million [9]. Full-Year Highlights - For the full year, total operating revenues were 6.1 billion, a 6.6% increase year over year, with net premiums written up 13% to 5.8billion[12].−Underwritingincomefortheyearwas5.8 billion [12]. - Underwriting income for the year was 571.5 million, more than tripling year over year, with a combined ratio of 92.3%, improving by 760 basis points [12]. Financial Position - As of the end of 2024, Axis Capital had cash and cash equivalents of 2.1billion,doublingfromthepreviousyear,withdebtat2.1 billion, doubling from the previous year, with debt at 1.3 billion [13]. - Book value per share increased by 20.4% to 65.27[13].CapitalDeployment−In2024,AxisCapitalreturned65.27 [13]. Capital Deployment - In 2024, Axis Capital returned 350 million to shareholders, including 200millioninsharerepurchasesand200 million in share repurchases and 150 million in dividends [14]. Market Outlook - Recent estimates for Axis Capital have shown a downward trend, with a consensus estimate shift of -8.84% [15]. - The stock currently holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [17]. Industry Comparison - Axis Capital operates within the Zacks Insurance - Property and Casualty industry, where competitor W.R. Berkley reported a 4.8% gain over the past month and revenues of $3.51 billion, reflecting a year-over-year change of +9.2% [18].