Progressive's Q1 Earnings Miss, Revenues Beat Estimates

Core Insights - The Progressive Corporation reported first-quarter 2025 earnings per share of $4.65, missing the Zacks Consensus Estimate of$ 4.72, but showing a year-over-year increase of 24.6% [1] Financial Performance - Net premiums written reached $22.2 billion, a 17% increase from$ 19 billion a year ago [1] - Net premiums earned grew by 20% to $19.4 billion, surpassing the Zacks Consensus Estimate of$ 19.2 billion [1] - Operating revenues increased by 20.7% year over year to $20.6 billion, driven by a 20.2% rise in net premiums earned, a 31.7% increase in net investment income, a 21.6% rise in fees, and a 32.1% increase in service revenue, beating the Zacks Consensus Estimate of$ 20.4 billion [2] - Total expenses rose by 20.1% to $64.7 billion, due to a 16.7% increase in losses and loss adjustment expenses, an 18.2% rise in policy acquisition costs, and a 40.8% surge in other underwriting expenses [2] - The net realized loss on securities was$ 212 million, compared to a gain of $156 million in the same quarter last year [3] - The combined ratio improved by 10 basis points to 86% from the prior-year quarter [3] Policy Growth - Policies in force in the Personal Lines segment increased by 18% year over year to 35.1 million [4] - The Personal Auto segment saw Agency Auto policies increase by 18% to 10.1 million and Direct Auto policies rise by 25% to 14.8 million [4] - The Commercial Auto segment policies rose by 6% year over year to 1.2 million, while the Property business had 3.6 million policies in force, up 11% [4] Financial Metrics - Progressive's book value per share was$ 49.39 as of March 30, 2025, up 32.6% from $33.80 a year earlier [5] - Return on equity was 39.3% in March 2025, an increase from 34% reported in the previous year [5] - The total debt-to-total capital ratio improved by 480 basis points to 19.2% [5] Market Position - Progressive currently holds a Zacks Rank 2 (Buy) [6]