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Atlas Financial (AFH) Earnings Beat, Revenues Miss in Q3


Atlas Financial Holdings, Inc. AFH reported third-quarter 2017 operating income of 63 cents per share that beat the Zacks Consensus Estimate by 50%. The bottom line also improved 21% year over year on higher revenues.

Atlas Financial Holdings, Inc. Price, Consensus and EPS Surprise

Atlas Financial Holdings, Inc. Price, Consensus and EPS Surprise | Atlas Financial Holdings, Inc. Quote

Behind the Headlines

Atlas Financial’s revenues surged 26.7% year over year to $57 million on higher net premiums earned (up 29.2%) and a significant rise in other income (up 125.5%). A 36% year-over-year decline in net investment income limited the upside. The top line also missed the Zacks Consensus Estimate by 4.2%.

The company’s total expenses increased 36.3% year over year to $49.6 million due to a rise in net claims incurred, acquisition costs, interest costs and other underwriting expenses.

Atlas Financial’s underwriting income was $6.8 million, down 5.5% year over year. Combined ratio deteriorated 440 basis points (bps) year over year to 87.9%.

Financial Update

Atlas Financial exited the quarter with cash and cash equivalents of $40.2 million, up 34.4% from 2016-end level.

Total assets of Atlas Financial increased 6.3% from year-end 2016 to $450.4 million as of Sep 30, 2017.

Debt level increased 25% from year-end 2016 to nearly $24 million as of Sep 30, 2017.

Total shareholders’ equity increased 13.4% from year-end 2016 to $144.4 million.

Book value was $11.96 per share as of Sep 30, 2017, up 13.5% from year-end 2016.

Atlas Financial’s return on average common equity was 14.5% in the quarter, lower than 18.5% in the year-ago quarter.

Zacks Rank

Atlas Financial carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here..

Performance of Other Insurers

Among other players from the insurance industry that have reported third-quarter earnings so far, the bottom line of The Progressive Corporation PGR, The Travelers Companies, Inc. TRV and RLI Corp. RLI beat the respective Zacks Consensus Estimate.

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